UNIVERSITAT DE VALENCIA
DEPARTAMENTO DE DERECHO MERCANTIL
FACULTAD DE DERECHO
GUÍA DOCENTE
Materia 18B
UN ESPACIO ÚNICO DE EMPRENDEDORES
Módulo 40025: EL ORDENAMIENTO JURÍDICO DE LA CO-MUNIDAD EUROPEA Y LAS LIBERTADES COMUNITARIAS
Curso 2014/2015
Profesora Dra. Albertina Albors-Llorens
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A. The Importance of Free Trade 1. Introduction The benefits of free trade can be summarised briefly – free or liberal trade allows for specialisation, specialisation leads to comparative advantage, comparative advantage leads to economies of scale and ultimately maximisation of consumer welfare and the most efficient use of worldwide resources.
Adam Smith, Wealth of Nations “It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. … What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom”.
2. Problems with the basic model
B. The Different Stages of Integration • Free Trade Area (FTA) – Member States remove all impediments to free movement of
goods among themselves but each state retains its autonomy to regulate its trading relations with non-Member States;
• Customs Union (CU) – free trade area + common external policy in respect of non-Member States (eg single customs tariff);
• Common Market (CM) – customs union + free movement of persons, services and capital; • Monetary Union (MU) – common market + single currency; • Economic Union (EU) – monetary union + single monetary and fiscal policy controlled by
a central authority; • Political Union (PU) – economic union + central authority sets not only monetary and fiscal
policies but is responsible to a central parliament with sovereignty of a nation’s government. Such a parliament might also set foreign and security policies.
• Full Union (FU) – the complete unification of the economies involved and a common policy on matters such as social security, income tax.
1. Free Trade Area/Customs Union Article 28(1) TFEU: The Community shall be based upon 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.
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& Co Ltd [1991] ECR I-4221, para.12 ‘liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty’.
(b) Market Access vs Discrimination Approach
According to the non-discrimination model, out-of-state goods, persons, services, and capital must enjoy the same treatment as their in-state equivalents. This model therefore adopts a comparative approach, focusing on how the domestic equivalent is treated. The advantage with the non-discrimination model is that it does not interfere with national regulatory autonomy. Member States remain free to regulate the way that goods are produced and services provided, on condition that their regulation applies equally to home and host state goods or persons. If there is (unjustified) discrimination, the ‘federal’ law requires the discriminatory element of the national measure to be set aside, but the substance of the national rule remains intact. The disadvantage of the non-discrimination model is explained by Advocate General Jacobs in Case C-412/93 Leclerc-Siplec v TF1 Publicité [1995] ECR I-179. He says that the central concern of the Treaty provisions is to prevent unjustified obstacles to trade between Member States. He said that ‘If an obstacle to trade exists it cannot cease to exist simply because an identical obstacle affects domestic trade’. For this reason, he and others advocate that a broader market access test should be applied. This provides that national rules preventing or hindering market access are unlawful, irrespective of whether they actually discriminate against imports or migrants, unless they can be objectively justified. The market access approach focuses on the perspective of the individual trader or migrant: what stands in their way of getting on to the market? The advantage of the market access approach is that it goes a long way towards building a single market by removing any unjustified obstacles to trade. It is based on the idea famously articulated in Cassis de Dijon that goods lawfully produced in one Member State should presumptively have free and unrestricted access to the market in another Member State. This enables the producer to develop a pan-European strategy to expand its market, thereby creating greater economies of scale for the producer and greater choice and competition for the consumer. It is a win-win situation. Translating this to persons, those who are qualified to practise in one Member State should also, in principle, be free to practise in another Member State. Once again, this enables the individual to expand their market, or to move to a place where their skills are better rewarded/appreciated. The disadvantage of the market access approach is firstly, that it is ‘inherently nebulous’, as Spaventa’s attempts to define it have shown. Secondly, its emphasis on market access overlooks the fact that rules which interfere with the exercise of a free movement right may also have almost as serious a consequence on free movement as the initial refusal of access.
(c) Competit ive federalism The basis of this model is that the national systems of rules are placed in competition with one another and so compete to produce the best rules. This is achieved by the central legislator laying down rules requiring that goods, persons and capital are free to leave one Member State
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(exit) and enter another while Member States remain free to regulate the production of goods and the qualifications of people according to their own standards (decentralisation).
The influences of the ordo-liberal school and the concept of Ordnungspolitik
But: Market Failure
In order to ensure successful regulatory competition, certain conditions must be satisfied.
• full mobility of people and resources at little or no cost; • full knowledge of each jurisdictions’ revenue and expenditure patterns; • wide choice of destination jurisdictions to enable the citizens to have sufficient choice to
make meaningful decisions about migration.
The absence of these pre-conditions means that market failure might result which may lead to a race to the bottom. See the case of Delaware.
(d) Centralisat ion
Due to market failure the central authorities may have to go beyond ensuring that negative integration can occur and instead engage in some form of positive integration (harmonisation). This centralised approach to federalism – sometimes referred to as (re)regulation (replacing national laws with central legislation) - was envisaged by the Treaty of Rome which expressly empowered the Community to adopt harmonisation measures.
2.3 Single Market
Article 3 TEU says that the “The Union shall establish an internal market.” This is the simplified form of one of the activities of the Community listed in the old Article 3 EC, which was the creation of “an internal market characterised by the abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital”. Cockfield’s White Paper: • Physical barriers to trade - like intra-EU border stoppages, customs controls and associated
paperwork; • Technical barriers to trade – eg meeting divergent national product standards adopted for
health and safety reasons or for consumer and environmental protection, other technical regulations, conflicting business laws, entering nationally protected public procurement markets.
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• Fiscal barriers to trade – especially differing rates of VAT and excise duties. The effect of the Single European Act 1986; Article 14. This says:
1. The Community shall adopt measures with the aim of progressively establishing the internal market over a period expiring on 31 December 1992, in accordance with the provisions of this Article and of Articles 15, 26, 47(2), 49, 80, 93 and 95 and without prejudice to the other provisions of this Treaty. 2.The internal market shall comprise 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.
3.The Council, acting by a qualified majority on a proposal from the Commission, shall determine the guidelines and conditions necessary to ensure balanced progress in all the sectors concerned.
Overview
The free movement of goods provisions are regarded as the cornerstone of the Treaties. It has four limbs:
• the establishment of a customs union (Article 28 TFEU, ex Article 23 EC) which involves the prohibition between member states of customs duties on imports and exports and of all charges having equivalent effect (Article 30 TFEU, ex Article 25 EC);
• the adoption of a common customs tariff in their relations with third countries; • the elimination of discriminatory taxation (Article 110 TFEU, ex Article 90 EC); and • the removal of quantitative restrictions on trade and all measures having equivalent effect
on imports (Article 34 TFEU, ex Article 28 EC) and exports (Article 35 TFEU, ex Article 29 EC).
There are two important distinctions between Articles 30 and 110 on the one hand and Article 34 on the other.
• Arts 30 and 110 concern fiscal measures, while Article 34 concerns non-fiscal measures.
• there is no express defence provided for Articles 30 and 110, while there are Article 36 derogations for Articles 34 and 35.
Negative integration can only go so far. In some areas harmonisation (positive integration) is essential. In these circumstances the Union needs to have the power to act (legal basis). When contemplating whether to act it needs to respect the principles of subsidiarity and proportionality.
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Fiscal Measures
FISCAL MEASURES: ARTS 28, 30 AND 110 TFEU
A. Introduction
Articles 30 and 110 are complementary but mutually exclusive: Case 57/65 Lütticke v Hauptzollamt Saarlouis [1966] ECR 205, 211. Note the following:
• Article 30 applies to imports only and is triggered by goods crossing a frontier: Joined Cases 2 and 3/62 Commission v Luxembourg and Belgium [1962] ECR 425, 433);
• Article 110 applies to charges borne both by imported and domestic products: Case 90/79 Commission v France [1981] ECR 283, para.13 and tends to apply taxation internally within the Member State.
• Article 30 contains an absolute prohibition on customs duties and charges having an equivalent effect;
• Article 110 allows Member States to tax goods provided that the taxation is neither discriminatory nor protective in effect.
These provisions are fundamental to the functioning of the common market: Cases 2 & 3/69 Sociaal Fonds voor de Diamantarbeiters [1969] ECR 211, 221; their overall purpose is to “to ensure normal conditions of competition and to remove all restrictions of a fiscal nature capable of hindering the free movement of goods within the Common Market”: Case 27/67 Fink-Frucht [1968] ECR 223, 233.
B. Article 30 Customs duties and charges having equivalent effect (outl ine only)
1. Customs duties
A customs duty is a charge, determined on the basis of a tariff, specifying the rates of duty to be paid by the importer to the host state: Case 26/62 Van Gend en Loos [1963] ECR 1.
2. Charges Having Equivalent Effect (CEEs)
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Case 24/68 Commission v Italy (statistical levy case) [1969] ECR 193:
Any 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 ... constitutes a CHEE ... 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 the domestic product.
It does not matter how a Member State describes the charge: it will be considered a CEE. Examples of CEEs:
• A statistical levy: Case 24/68 Commission v Italy [1969] ECR 193; • Tax on the export of a work of art to another Member State: Case 7/68 Commission v Italy
and the subsequent case Case 18/71 Eunomia v Italy [1971] ECR 811; • Health inspection charges imposed by a Member State on the products from other
Member States: eg Case 39/73 REWE-Zentralfinanz v Direktor der Landwirtschaftskammer Westfalen-Lippe [1973] ECR 1039; Case 314/82 Commission v Belgium [1984] ECR 1543, para.16 cf health inspection charges for inspections carried out to fulfil obligations imposed by Union law: Case 46/76 Bauhuis v Netherlands [1977] ECR 5.
However, if the payment is considered consideration for a service then it is not a CEE: Case 132/82 Commission v Belgium [1983] ECR 1649 “when payment of storage charges is demanded solely in connection with the completion of customs formalities, it cannot be regarded as the consideration for a service actually rendered to the importer”.
Crossing a frontier: Case C-163/90 Legros [1992] ECR I-4625:
A charge levied at a regional frontier by reason of the introduction of products into a region of a Member State constitutes an obstacle to the free movement of goods which is at least as serious as a charge levied at the national frontier by reason of the introduction of the products into the whole territory of a Member State. (emphasis added)
Case C-363/93 Lancry v Direction Général des Douanes [1994] ECR I-3957, para.30.
3. Remedies
3.1 Direct Effect
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Case 26/62 Van Gend en Loos [1963] ECR 1; Case C-16/94 Edouard Dubois v Garanor Exploitation SA [1995] ECR I-2421.
3.2 Repayment of unlawful charges
A restitutionary claim is available to the trader who has paid a customs duty, a charge having equivalent effect and discriminatory taxation levied by a Member State contrary to Union Law except in the case of unjust enrichment: Case 199/82 San Giorgio [1983] ECR 3595; Case C-192/95 Comateb [1997] ECR I-165 – the position of the ultimate consumer (Case C-398/09 Lady & Kid [2011] ECR I-000 confirms that this is the only exception to the rule on restitution).
National procedural rules will apply to that claim provided that they are not less favourable than those relating to similar claims regarding national charges (principle of equivalence) and not framed so as to render virtually impossible the exercise of rights conferred by Union law (principle of effectiveness): Case 199/82 San Giorgio [1983] ECR 3595. National time limits will apply to these claims provided they are reasonable: Case C-231/96 Edis v Mininstero delle Finanze [1998] ECR I-4951.
In addition there may be a claim for damages for loss of sales: Case C-192/95 Comateb [1997] ECR I-165, para 31; Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame [1996] ECR I-1029
B. Article 110 Internal Taxation
1. Introduction: The Relevant Treaty Provisions
Article 110(1):
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”. (Similar products)
Article 110(2):
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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”. (Products in competition).
Case 193/85 Co-frutta v Amministrazione delle Finanze dello Stato [1987] ECR 2085
2. Freedom for Member States to Tax
In the absence of Union legislation, Member States are free to tax provided they do so on a non-discriminatory or protectionist basis, although this will lead to divergences in taxation across the Union. As the Court said in Case 243/84 Johnnie Walker [1986] ECR 875, para.22:
that [Union] law at its present stage of development does not restrict the freedom of each Member State to lay down tax arrangements which differentiate between certain products on the basis of objective criteria, such as the nature of the raw materials used or the production processes employed. Such differentiation is compatible with [Union] law if it pursues objectives of economic policy which are themselves compatible with the requirements of the Treaty and its secondary legislation, and if the detailed rules are such as to avoid any form of discrimination, direct or indirect, in regard to imports from other member states or any form of protection of competing domestic products”.
Case 252/86 Bergandi v Directeur général des impôts [1988] ECR 1343(games machines); Case 140/79 Chemial Farmaceutici SpA v DAF SpA [1981] ECR 1 (denatured synthetic alcohol).
3. Goods which are similar (Article 110(1))
3.1 Definit ion
(a) The test
Article 110(1) prohibits the host Member State from imposing higher tax on goods imported into the Member State than on similar domestic goods.
The formal test to define “similar”: Case 27/67 Fink-Frucht [1968] ECR 223, 232:
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Similarity between products within the meaning of the first paragraph of Article [110] exists when the products in question are normally to be considered as coming within the same fiscal, customs or statistical classification, as the case may be.
The economic test to define “similar”: Case 45/75 REWE v HZA Landau [1976] ECR 181. It looked to see whether the products “which at the same stage of production or marketing, have similar characteristics and meet the same needs from the point of view of consumers”.
(b) Factors taken into account by the Court
Case 27/67 Fink-Frucht [1968] ECR 223, 232; Case 106/84 Commission v Denmark [1986] ECR 833, para.12:
…in order to determine whether products are similar it is necessary first to consider certain objective characteristics of both categories of beverages, such as their origin, the method of manufacture and their organoleptic properties, in particular taste and alcohol content, and secondly to consider whether or not both categories of beverages are capable of meeting the same need from the point of view of consumers.
Case C-302/00 Commission v. France (cigarettes) [2002] ECR I-000; Case 243/84 Johnnie Walker [1986] ECR 875 (whisky v. fruit liqueur wines); Case 184/85 Commission v Italy [1987] ECR 2013 (bananas v. other fruit).
3.2. Types of discrimination
Article 110 prohibits both direct and indirect discrimination. These terms must be interpreted widely: Case 28/67 Molkerei-Zentrale Westfalen v Hauptzollamt Paderborn [1968] ECR 143, 155.
(a) Direct discrimination
Direct discrimination involves less favourable treatment on the grounds of nationality. Since there are no express defences to Article 110 this measure cannot be saved and so breaches Article 110.
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Examples: Case 57/65 Lütticke v Hauptzollamt Saarlouis [1966] ECR 205; Case C-47/88 Commission v Denmark [1990] ECR I-4509 (used motor vehicles); Case C-213/96 Outokumpu Oy [1998] ECR I-1777. The prohibition against discrimination also applies to the condition in which the tax is paid: Case 55/79 Commission v Ireland [1980] ECR 481.
(b) Indirect discrimination
A measure is indirectly discriminatory which on its face (in law) it makes no reference to nationality but in reality (in fact) imposes a particular burden on the imported good. See Case 112/84 Humblot [1985] ECR 1367; Case 433/85 Feldain v Directeur des Services Fiscaux [1987] ECR 3536 cf Case 132/88 Commission v Greece [1990] ECR I-1567.
Unlike a directly discriminatory tax, an indirectly discriminatory tax breaches Article 110 unless it can be objectively justified: Case 132/88 Commission v Greece [1990] ECR I-1567 “In view of the poor infrastructure of the road network and the problems of pollution prevailing in Greece, tax legislation discouraging the purchase of large-engined cars was justified”; Case 252/86 Bergandi v Directeur géneral des impôts [1988] ECR 1343, para.32 (discouragement of certain types of games machines); Case 196/85 Commission v France [1987] ECR 1597 (natural sweet wines) (regional development); Case 140/79 Chemial Farmaceutici SpA v DAF SpA [1981] ECR 1 (denatured alcohol) (promoting agriculture and reserving petrol for other “more important uses”) even though in these cases the Court did not find indirect discrimination on the facts.
4. Goods which are in competit ion (Article 110(2))
4.1 Introduction
If goods are not similar then the Court looks to see if they are in competition: Case 27/67 Fink-Frucht [1968] ECR 223, 232.
4.2 The test
Case 356/85 Commission v Belgium [1987] ECR 3299, para.15:
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It follows that any assessment of the compatibility of a given tax with the second paragraph of Article [110] must take account of the impact of that tax on the competitive relationship between the products concerned. The essential question is therefore whether or not the tax is of such a kind as to have the effect, on the market in question, of reducing potential consumption of imported products to the advantage of competing domestic products.
Case 170/78 Commission v UK (No.1) [1980] ECR 417 (wine and beer), para.6:
it is necessary to consider not only the present state of the market but also the possibilities for development within the context of free movement of goods at the [Union] level and the further potential for the substitution of products for one another which may be revealed by intensification of trade, so as fully to develop the complementary features of the economies of the Member States in accordance with the objectives laid down by Article [3 TEU].
…
The Court considers that the Commission’s argument is well-founded in that it is impossible to deny that to a certain extent the two beverages in question are capable of meeting identical needs, so that it must be acknowledged that there is a certain degree of substitution for one another. For the purpose of measuring the possible degree of substitution, it is impossible to restrict oneself to consumer habits in a member state or in a given region. In fact, those habits, which are essentially variable in time and space, cannot be considered to be a fixed rule; the tax policy of a Member State must not therefore crystallize given consumer habits so as to consolidate an advantage acquired by national industries concerned to comply with them.
Case 170/78 Commission v UK (No.2) [1983] ECR 2265, para.27:
the effect of the United Kingdom tax system is to stamp wine with the hallmarks of a luxury product which, in view of the tax burden which it bears, can scarcely constitute in the eyes of the consumer a genuine alternative to the typical domestically produced beverage.
What should the UK do? See Easson, “The Spirits, Wine and Beer Judgments: A Legal Mickey Finn? (1980) 5 ELRev 318 and “Cheaper wine or Dearer Beer?” (1984) 9 ELRev 57.
Cf Case C-167/05 Commission v. Sweden [2008] ECR I-2127.
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4.3 The Globalised Approach
Sometimes the Court is not able to distinguish clearly between Articles 110(1) and (2) - the globalised approach: the “spirits” cases - Case 171/78 Commission v Denmark [1980] ECR 447 (acquavit favoured over competing spirits); Case 169/78 Commission v Italy [1980] ECR 385 (Italy favoured grappa over rum); Case 168/78 Commission v France [1980] ECR 347, (cognac favoured over whisky):
It appears from the foregoing that Article [110], taken as a whole, may apply without distinction to all the products concerned. It is sufficient therefore to examine whether the application of a given national tax system is discriminatory or, as the case may be, protective, in other words whether there is a difference in the rate or the detailed rules for levying the tax and whether that difference is likely to favour a given domestic production. It will be necessary to examine within this framework the economic relationships between the products concerned and the characteristics of the tax systems which form the subject-matter of the disputes in the case of each of the applications lodged by the Commission
Subsequently, the Court has been more rigorous in distinguishing between Article 110(1) and (2) in cases such as Case 243/84 Johnnie Walker [1986] ECR 875, although not always: Case C-230/89 Commission v Greece [1991] ECR I-1909 (ouzo taxed at a lower rate than than whisky).
5. The Boundary between Articles 28-30 and 110 TFEU
5.1 The so-called “exotic” import
If there is no similar or competing domestic product (or a very low domestic production of the particular good), Article 110 does not prohibit the imposition of any internal taxation on goods which do not compete with any domestic product, provided the tax fits within the general scheme of taxation applied systematically to categories of products in accordance with objective criteria irrespective of the origin of the products: Case 27/67 Fink-Frucht [1968] ECR 223, 231; Case 193/85 Co-frutta v Amministrazione delle Finanze dello Stato [1987] ECR 2085.
5.2 Para-f iscal charges
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Joined Cases C-789-83/90 Compagnie Commerciale de l’ouest [1992] ECR I-1847:
…If the advantages stemming from the use of the proceeds of the charge in question fully offset the burden borne by the domestic product when it is placed on the market, that charge constitutes a charge having an effect equivalent to customs duties, contrary to Article [30] et seq. of the Treaty. If, on the other hand, those advantages only partly offset the burden borne by domestic products, the charge in question is subject to Article [110] of the Treaty. In the latter case, the charge would be incompatible with Article [110] of the Treaty and is therefore prohibited to the extent to which it discriminates against imported products, that is to say to the extent to which it partially offsets the burden borne by the taxed domestic product. It is for the national court to determine whether the charge imposed on the domestic product is wholly or partly offset by the use of the revenue from the charge in question for the benefit of domestic products.
Case 77/72 Capolongo v. Azienda Agricole Maya [1973] ECR 611.
6. Remedies
6.1 Direct Effect
Article 110 is directly effective:
• Article 110(1) Case 57/65 Lutticke [1966] ECR 205; • Article 110(2) Case 27/67 Fink-Frucht [1968] ECR 223.
6.2 Other Remedies
• elimination of the discrimination in the case of Article 110(1) by equalising the taxes imposed on the domestic and imported goods: Case 148/77 H. Hansen jun. & O. C. Balle GmbH & Co. v Hauptzollamt de Flensburg [1978] ECR 1787, para.20;
• in the case of Article 110(2) the state must remove the protective effect, although this does not necessarily mean equalising the tax burden on the imported goods: Case 170/78 Commission v UK [1983] ECR 2265 (wine and beer)
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• Repayment of unlawful charges: Case 68/79 Hans Just I/S v Danish Ministry for Fiscal Affairs [1980] ECR 501;
• National time limits will usually apply to these claims: Case C-90/94 Haahr Petroleum v Åbenrå Havn [1997] ECR I-4085.
READING
Barnard, Chapter 3.
Further reading:
A.Easson, “Fiscal Discrimination: New Perspectives on Art.95 of the EEC Treaty” (1981) 18 CMLRev 521. 535
Barents, “Recent case law on the prohibition of fiscal discrimination under Article 95” (1986) 23 CMLRev 641
Barents, “Charges of Equivalent Effect to Customs Duties” (1978) 15 CMLRev 415
Pescatore, “Some Critical remarks on the ‘Single European Act’” (1987) 24 CMLRev 9
Tiley, “The Law of Taxation in a European Environment” (1992) 51 CLJ 451
Easson, “The Spirits, Wine and Beer Judgments: A Legal Mickey Finn? (1980) 5 ELRev 318 and “Cheaper wine or Dearer Beer?” (1984) 9 ELRev 57.
Hedemann-Robinson, “Indirect Discrimination: Article 95(1) EC Back to Front and Inside Out” (1995) 1 EPL 439
Danusso and Denton, “Does the European Court of Justice Look for a Protectionist Motive under Article 95?” [1990] 1 LIEI 67
Dougan, “Cutting your Losses in the Enforcement Deficit: A Community Right to the Recovery of Unlawfully Levied Charges? (1999) 1 Cambridge Yearbook of European Law 217.
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Non-fiscal measures
QUANTITATIVE RESTRICTIONS & MEASURES HAVING EQUIVALENT EFFECT
A. Introduction
1. The Relevant Treaty Provisions
Article 34 provides:
Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.
Article 35 provides:
Quantitative restrictions on exports and all measures having equivalent effect shall be prohibited between Member States.
If a measure is “caught” by Article 34 it is prohibited unless it can be “saved” under a permitted derogation provided by Article 36. The burden of proving the justification lies with the Member State that seeks to invoke it. Article 36 provides:
The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property.
Such prohibitions or restrictions shall not, however, constitute a means of arbitrary
discrimination or a disguised restriction on trade between Member States.
The Union’s objective: Case 207/83 Commission v UK [1985] ECR 1202 “the Treaty, by establishing a common market and progressively approximating the economic policies of the Member States seeks to unite national markets in a single market having the characteristics of a domestic market”.
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2. Direct Effect
Articles 34 and 35 are directly effective: see Case 74/76 Ianelli v. Meroni [1977] ECR 557 and Case 83/78 Pigs Marketing Board v. Redmond [1978] ECR 2347. Vertical and horizontal direct effect? Cf Case C-281/98 Angonese v. Cassa di Risparmio di Bolzano [2000] ECR I-4139. AG Poiares Maduro’s Opinion in Case C-438/05 Viking [2007] ECR I-10779. Administrative regulations or simply administrative action also covered, even if they are not legally binding, provided they are capable of influencing the conduct of traders and consumers in that state: Case 45/87 Commission v. Ireland (“Dundalk water”) [1988] ECR 4929; Case 249/81 Commission v. Ireland (“Buy Irish campaign”) [1982] ECR 4005; Case 222/82 Apple and Pear Development Council v. Lewis [1983] ECR 4083 (buy British fruit).
NB Case C-265/95 Commission v France [1997] ECR I-6959 (French farmers) and Council Regulation 2679/98 (OJ [1998] L337/8) designed to set up an intervention mechanism to safeguard free trade in the single market which was adopted following the Court of Justice’s ruling in Commission v France. Article 2 provides:
This Regulation may not be interpreted as affecting in any way the exercise of fundamental rights, as recognised in Member States, including the right or freedom to strike.
Cf Case C-112/00 Eugen Schmidberger, Internationale Transporte und Planzüge v. Republic of Austria [2003] ECR I-5659.
B. QRs and MEEs
1. Quantitat ive restrict ions (QRs)
QR are “measures which amount to a total or partial restraint of, according to the circumstances, imports, exports or goods in transit”: Case 2/73 Geddo v Ente [1973] ECR 865.
NB a total prohibition on import is a quantitative restriction (pace the English Court of Appeal): Case 34/79 Henn and Darby [1979] ECR 3795.
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2. Measures of equivalent effect (MEEs) 2.1 What are they? In Case 2/73 Geddo v Ente [1973] ECR 865 the Court said of MEEs “whatever the description or technique employed, they can also consist of encumbrances having the same effect” as QRs.
The general definition of a measure having equivalent effect can be found in Case 8/74 Procureur du Roi v. Dassonville [1974] ECR 837 (the “Dassonville formula”):
All trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-[Union] trade are to be considered as measures having an effect equivalent to quantitative restrictions.
The market access v the discrimination approach: Case C-140/03 Commission v Greece [2005] ECR I-3177; C-268/91 Keck and Mithouard [1993] ECR I-6097; Case C-110/05 Commission v. Italy (trailers) [2009] ECR I-519.
2.2 The language of discrimination
Measures that clearly target only imports (i.e. that discriminate against them: distinctly applicable measures) are going to prove an obstacle to the free movement of goods: what about measures which apply both to imports and to domestic production? Distinctly applicable vs indistinctly applicable measures (equally applicable measures): see Directive 70/50/EEC (1970 OJ L13, p. 29).
Compare Art. 2 (distinctly applicable measures):
This Directive covers measures ... which hinder imports which could otherwise take place, including measures which make importation more difficult or costly than the disposal of domestic production.
In particular, it covers measures which make imports or the disposal, at any marketing stage, of imported products subject to a condition - other than a formality - which is required in respect of imported products only, or a condition differing from that required for domestic products and more difficult to satisfy. Equally, it covers, in particular measures which favour domestic products or grant them a preference, other than an aid, to which conditions may or may not be attached”.
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Art. 3 concerns indistinctly (or equally) applicable measures:
This Directive also covers measures governing the marketing of products which deal, in particular, with shape, size, weight, composition, presentation, identification or putting up and which are equally applicable to domestic and imported products, [where the restrictive effect of such measures on the free movement of goods exceeds the effects intrinsic to trade rules.
This is the case, in particular, where:
- the restrictive effects on the free movement of goods are out of proportion to their purpose;
- the same objective can be attained by other means which are less of a hindrance to trade.]
The definition of indistinctly applicable measures still is important. The section on brackets is no longer good law.
According to the orthodoxy, the distinction between distinctly applicable measures and indistinctly applicable measures is important because:
• distinctly applicable measures are caught by Article 34 and are only capable of justification under the Article 36 derogations;
• indistinctly applicable measures are capable of justification both under Article 36 and under the “mandatory requirements” doctrine.
3. What are dist inctly applicable or (directly) discriminatory measures?
3.1 Il lustrations from the case law
• requiring import and export licences: Joined Cases 51–54/71 International Fruit (No.2), supra; Case 21/84 Commission v France [1985] ECR 1356; Case 251/78 Denkavit Futtermittel v Mininster für Ernährung [1979] ECR 3369
• inspections of imports or exports only: Case 63/74 Cadsky [1975] ECR 281; Case 53/76 Procureur de la Republique v. Bouhelier [1977] ECR 197 (export inspection of watches); if claim justified on health grounds, must have equivalent checks on domestic products: Case 4/75 Rewe Zentralfinanz [1975] ECR 843.
• preference or advantage for domestic products: Case 45/87 Commission v. Ireland (“Dundalk water”) [1988] ECR 4929. The same principle applies to “Buy National” campaigns: Case 249/81 Commission v. Ireland (“buy Irish campaign” supra) cp Case 222/82 Apple and Pear Development Council (“buy British fruit”; supra). As a result of these two cases the Commission has offered “Guidelines for the Member States’
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involvement in Promotion of Agricultural and fisheries Products - Article 30 Aspects OJ [1986] C 27/3.
• designations of quality and/or origin: Case 113/80 Commission v. Ireland [1981] ECR 1625 (“Irish souvenirs”); Case 207/83 Commission v UK [1985] ECR 1202. The only time designations of origins are lawful is where they genuinely reflect special characteristics: see Case 12/74 Commission v. Germany [1975] ECR 181.
3.2 “Reverse discrimination”
Article 34 does not apply to wholly internal situations and thus does not preclude reverse discrimination: Case 98/86 Ministère Public v. Mathot [1987] ECR 809 although the case law in this area has become increasingly uncertain: Joined Cases C-321-4/94 Pistre [1997] ECR I-2343.
4. The Article 36 derogations
4.1 Introduction
Article 36: The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property.
Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.
Article 36 EC: four groups of derogations; NB proviso in final sentence.
The list in Article 36 is exhaustive and, as derogations from a basic Treaty freedom, the grounds given are to be construed narrowly: see, e.g. Case 113/80 Commission v. Ireland (supra): “[since] Article [36] constitutes a derogation from the basic rules that obstacles to the free movement of goods between Member States shall be eliminated and must be interpreted
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strictly, the exceptions listed therein cannot be extended to cases other than those specifically laid down”.
Article 36 refers to matters of a non-economic nature: Case C-324/93 R v Secretary of State for the Home Department, ex parte Evans Medical Ltd (Generics (UK) Ltd intervening) [1995] ECR I-563.
4.2 Public morali ty, public policy or public security
(a) Public morali ty
Case 34/79 Henn and Darby [1979] ECR 3795 cp Case 121/85 Conegate v. HM Customs and Excise [1986] ECR 1007.
(b) Public policy
Case 7/78 R v. Thompson [1978] ECR 2247.
Cp Case 231/83 Cullet v. Centre Leclerc Toulouse [1985] ECR 305; Case C-112/00 Eugen Schmidberger, Internationale Transporte und Planzüge v. Republic of Austria [2003] ECR I-5659; Case C-36/02 Omega Spielhallen [2004] ECR I-9609.
(c) Public security
Case 72/83 Campus Oil [1984] ECR 2727; Case C-398/98 Commission v Greece [2001] ECR I-7915.
4.3 The protection of health and l i fe of humans, animals or plants
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Easy use of health protection to afford disguised restriction on trade: Case 40/82 Commission v. United Kingdom [1982] ECR 2793 (Newcastle disease). The Court must be satisfied that:
• a genuine threat to one of the interests specified in Article 36 has been established • that the measures taken are apt to achieve protection from the perceived threat • that the steps are proportionate to the end in view.
The need to show that there is a seriously considered health policy cf. Case 40/82 Commission v. United Kingdom [1982] ECR 2793 (Newcastle disease); Case 4/75 Rewe-Zentralfinanz (San José scale); Case 124/81 Commission v UK [1983] ECR 203.
What is the situation if the scientific evidence about the health risks is disputed? Case 174/82 Officer van Justitie v Sandoz [1983] ECR 2445; Case C-192/01 Commission v. Denmark [2003] ECR I-9693 (precautionary principle).
Can states impose a health check on products which have already been subjected to a check in the state of origin (a system of double checks)? Case 272/80 Frans-Nederlandse Maatschappij voor Biologische Producten [1981] ECR 3277; Case C-292/94 Criminal Proceedings against Brandsma [1996] ECR I-2159.
Animal health is protected too: Case C-67/97 Bluhme (Laesø Brown Bee) [1998] ECR I-8033
Does public health extend to environmental protection? Case C-203/96 Chemische Afvalstoffen Dusseldorp BV [1998] ECR I-4075; Case C-389/96 Aher-Waggon v Germany [1998] ECR I-4473; Case C-379/98 PreussenElektra [2001] ECR I-2099.
4.4 The protection of national treasures possessing art ist ic. historic or archaeological value
No case (Case 7/68 Commission v. Italy (supra) concerned a tax on exports i.e. a CEE.
4.5 The protection of industrial and commercial property
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Not on syllabus.
4.6 The Article 36 proviso
As we have seen, all measures for which an Article 36 derogation is claimed are only justifiable to the extent that they do not “constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States”. Restrictive measures must be limited to what is necessary to achieve the permissible protective purpose and proportionate to that aim: see, e.g., Case 72/83 Campus Oil (supra).
4.7 Proportionali ty
If the Member State has the choice between several means of achieving the same objective, it must choose the measure that is least restrictive of intra-[Union] trade e.g., Case 302/86 Commission v. Denmark (recyclable bottles) (supra).
4.8 Harmonisation Once a Union harmonisation measure has been adopted ensuring the protection of public health which exhaustively harmonises the field recourse to Article 36 is no longer justified: Case C-5/94 Hedley Lomas [1996] ECR 2553 5. Indist inctly applicable measures
5.1 Definit ion
These are measures which genuinely apply to both national and domestic products in the same way but they have a particular burden on the imported goods. This was identified by Article 3 of Directive 70/50.
Case 16/83 Prantl [1984] 1299 (Bocksbeutel case) the national measure is caught by the prohibition in Article 34 if “in practice it produces protective effects by favouring typical national products and, by the same token, operating to the detriment of certain types of products from other Member States”; Case 261/81 Walter Rau v. De Smedt [1982] ECR 3961.
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The most obvious example of cases falling into this category concern so-called product requirements imposing a dual burden on imported goods - Keck (para.15) “where they are the consequence of applying rules that lay down requirements to be met by such goods (such as requirements as to designation, form, size, weight, composition, presentation, labelling, packaging) to goods from other Member States”.
However, there was a group of cases concerning non-product requirement rules that were considered indistinctly applicable for want of a better classification (eg Case C–270/02 Commission v. Italy (foodstuffs for sportsmen and women) [2004] ECR I–1559 prior authorisation regime). These have now been dealt with under Case C-110/05 Commission v. Italy [2009] ECR I-519 (see below).
5.2 Cassis de Dijon
Case 120/78 Rewe Zentrale v. Bundesmonopolverwaltung fur Branntwein (“Cassis de Dijon”) [1979] ECR 649.
The Court ruled:
In the absence of common rules (...) it is for Member States to regulate all matters relating to [the production and marketing of alcohol beverages] on their own territory.
Obstacles to movement in the [Union] resulting from disparities between the national laws relating to the marketing of the products in question must be accepted in so far as those provisions may be recognised as being necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer.” (para. 8).
There is therefore no valid reason why, provided that they have been lawfully produced and marketed in one of the Member States, alcoholic beverages should not be introduced into any other Member State” (presumption of equivalence or mutual recognition) (para.14).
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The only time Member States can rebut the presumption of equivalence is if they can show that one of the mandatory requirements can be satisfied (the so-called rule of reason approach) and that the steps taken are proportionate: Case 261/81 Rau [1982] ECR 3961 “If a Member State has a choice between various measures to attain the same objective it should choose the means which least restricts the free movement of goods”.
5.3 The “mandatory requirements”
Case 120/78 Rewe Zentrale v. Bundesmonopolverwaltung fur Branntwein (“Cassis de Dijon”) [1979] ECR 649:
• the effectiveness of fiscal supervision • the protection of public health • the fairness of commercial transactions, and • the defence of the consumer (NB the different concepts of the consumer: eg Case C-
210/96 Springenheide v Oberkreisdirektor des Kreises Steinfurt [1998] ECR I-4657 “the presumed expectations … in an average consumer who is reasonably well-informed and reasonably observant and circumspect” but account can be taken of “social, cultural or linguistic factors” in the Member States: Case C-220/98 Estée Lauder Cosmetics GmbH v Lancaster Group GmbH, [2000] ECR I- 117 cf the “particularly vulnerable consumer” such as those who are “behind with their education and are seeking to catch up”: Case 382/87 Ministère Public v. Buet [1989] ECR 1235, para.13 (door-to-door selling)).
The ‘German’ problem: Case C-315/92 Verband Sozialer Wettbewerb eV v. Clinique Laboratories SNC [1994] ECR I-317; Case C-470/93 Verein gegen Unwesen in Handel und Gewerbe Köln v Mars GmbH [1995] ECR I-1923.
The list of mandatory requirements is not closed: additional grounds of justification have been permitted. See, e.g.:
• protection of the working environment: Case 155/80 Oebel [1981] ECR 3409 • cinema as form of cultural expression: Case 60/84 Cinethèque [1985] ECR 2605 • protection of national or regional socio-cultural characteristics: Case 145/88 Torfaen
Borough Council v. B & Q [1989] ECR 3851 • maintenance of the plurality of the press: Case C-368/95 Vereinigte Familapress
Zeitungsverlags- und vertriebs GmbH ('Familiapress’) v Heinrich Bauer Verlag [1997] ECR I-3689
• protection of the environment Case 302/86 Commission v. Denmark [1988] ECR 4607 (recyclable bottles); Case C-2/90 Commission v Belgium (Walloon Waste) [1992] ECR I-4431
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• preventing the risk of seriously undermining the financial balance of the social security system: Case C-120/95 Decker v Caisse de Maladie des Employés Privés [1998] ECR I-1831.
• Protection of fundamental rights: Case C-112/00 Eugen Schmidberger, Internationale Transporte und Planzüge v. Republic of Austria [2003] ECR I-5659;
• Protection of children: Case C-244/06 Dynamic Medien [2008] ECR I-505.
NB These mandatory requirements are available only in the absence of common rules (harmonisation).
5.4 Proportionali ty
(a) The general rules
The national restriction justified by a mandatory requirement must be “proportionate” to the aim pursued: see, e.g., Case 178/84 Commission v Germany [1987] ECR 1227 where the Court said that “It is also necessary for such rules to be proportionate to the aim in view. If a Member State has a choice between various measures to attain the same objective it should choose the means which least restricts the free movement of goods”.
Two tests:
• test of suitability • test of necessity
Generally labelling is the most proportionate solution: Case 286/86 Minstère Public v Deserbais [1988] ECR 4907 (Case C-358/95 Tommaso Morellato v Unità sanitaria locale (USL) n. 11 di Pordenone [1997] ECR I-1431); Case 178/84 Commission v Germany (Bier) [1987] ECR 1227 and Case C-46 and 48/93 Brasserie du Pêcheur and Factortame [1996] ECR I-2617; Case 261/81 Rau [1982] ECR 3961; Case 16/83 Prantl [1984] 1299.
Language in which information provided: see, e.g., Case 78/80 Fietje [1980] ECR 3839 (use of word “likeur” in labelling beverages).
Case C-368/95 Vereinigte Familapress Zeitungsverlags- und vertriebs GmbH ('Familiapress‘) v Heinrich Bauer Verlag [1997] ECR I-3689.
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(b) Good Governance
Move to greater ‘good governance approach’: Case C-309/02 Radlberger Getränkegesellschaft mbH & Cov. Land Baden-Württemberg [2004] ECR I-11763, para. 70; Case C-463/01 Commission v. Germany (deposit and return) [2004] ECR I-11705, para. 67; Case C-320/03 Commission v. Austria (Heavy Lorries) [2005] ECR I-7929, para. 35 ; Case C-24/00 Commission v. France (nutrients) [2004] ECR I-1277 and Case C-95/01 Greenham and Abel [2004] ECR I-1333.
5.5 Fundamental Rights
Case C-368/95 Vereinigte Familapress Zeitungsverlags- und vertriebs GmbH ('Familiapress‘) v Heinrich Bauer Verlag [1997] ECR I-3689
5.6 Reconsideration of the orthodoxy
Should the mandatory requirements apply only to indistinctly applicable measures? Case C-2/90 Commission v Belgium [1992] ECR I-4431 (Walloon Waste); Case C-389/96 Aher-Waggon v Germany [1998] ECR I-4473 (aircraft noise); AG Jacobs in Case C-379/98 PreussenElektra v Schleswag AG [2001] ECR I-2099.
Case C-54/05 Commission v. Finland [2007] ECR I-2473; Case C-531/07 Fachverband der Buch- und Medienwirtschaft v. LIBRO Handelsgesellschaft mbH [2009] ECR I-000, para. 34
5.7 Regulation 764/2008
Regulation 764/2008 lays down procedures relating to the application of certain national technical rules to products lawfully marketed in another Member State procedure to be followed by national authorities wanting to ban a product or requiring the product to be modified; burden of proof is on the host state as to why it is denying market access rather than on the trader as to why its goods should be admitted.
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It also establishes product contact points in each Member State which must provide information on the technical rules applicable.
6. Market access approach
Case C-110/05 Commission v. Italy (trailers) [2009] ECR I-519, para. 37: it identified three situations where a rule could be considered an MEE and so breach Article 34:
(1) distinctly applicable measures;
(2) indistinctly applicable product requirements; and
(3) ‘Any other measure which hinders access of products originating in other Member States to the market of a Member State’.
NB In Trailers the Court appears to compensate for its (re)adoption of a broad market access test with a lighter touch both to judicial review of the justification put forward by Italy (road safety) and proportionality; cf Case C–142/05 Åklagaren v. Mickelsson [2009] ECR I-000.
The market access test as residual: Case C-456/10 ANETT v Administración del Estado [2012] ECR I-000:
C. The Keck formula
1. The Diff icult ies leading to the ruling in Keck
1.1 The Problem
How to deal with those measures - time/place/manner of marketing products - which may restrict trade in some way but are not designed to protect the home market?
See the Sunday trading cases: Case 145/88 Torfaen BC v B&Q [1989] ECR 765. The Court ruled:
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It is therefore necessary in a case such as this to consider first of all whether rules such as those at issue pursue an aim which is justified with regard to [Union] law ... Such rules reflect certain political and economic choices in so far as their purpose is to ensure that working and non-working hours are so arranged as to accord with national or regional socio--cultural characteristics. ...
Secondly, it is necessary to ascertain whether the effects of such national rules exceed what is necessary to achieve its aim in view. As is indicated in Article 3 of Commission Directive 70/50 ... the prohibition laid down in Article [34] covers national measures governing the marketing of products where the restrictive effects of such measures on the free movement of goods exceeds the effects intrinsic to trade rules. The question whether the effects of specific national rules do in fact remain within that limit is a question of fact to be determined by the national court.”
The problem was the Court left it up to the national courts to decide whether the restrictive effects exceed the intrinsic effects. Different national courts reached different conclusions: Joined Cases C-306/88, C-304/90, C-169/91 Rochdale Borough Council v. Anders (etc.) (Sunday trading) [1992] TLR 622, [1992] ECR I-6457 and see, e.g., Gormley (1990) 27 CMLRev 141; Arnull (1991) 16 ELRev 112; Barnard (1994) 57 MLR 449 cf. Hoffman J in Stoke on Trent City Council v. B &Q [1990] 3 CMLR 31.
See subsequently: Cases C-312/89 and 332/89 U.D.S. CGT de l’Aisne v. Sidef Conforama; Criminal proceedings against Marchandise [1991] ECR I-1027; Case C-169/91 Stoke-on-Trent v B&Q [1992] ECR I-6457.
1.2 Different methods in resolving in the problem
Meanwhile, other earlier cases had in fact raised a similar problem, although the court did not deal with it in these terms:
• not MEEs at all: Case 75/81 Blesgen [1982] ECR 1211; Case C-23/89 Quietlynn v. Southend BC [1990] ECR I-3059 and Case C-69/88 Krantz GmbH v. Ontvanger der Directe Belastingen [1990] ECR I-583
• MEEs but potentially justifiable under Cassis: see Case 286/81 Oosthoek’s Uitgeversmaatschaapij [1982] ECR 4575; Case 362/88 GB-Inno-BM v. CLC [1990] ECR I-667.
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1.3 Different academic views
• accept that all such rules are MEEs and must be justified under Article 36 or (more probably) on the basis of a mandatory requirement: see, e.g., Gormley (1990) 27 CMLRev 141; Arnull (1991) 16 ELRev 112
• perhaps solution in wording of Dassonville formula itself, because Dassonville refers to rules that are capable of hindering trade (not merely affecting trade), i.e., a higher threshold test: see Steiner (1992) 29 CMLRev 749.
• perhaps all rules concerned with the circumstances in which products are marketed (place, time, manner, authorised person, etc., etc.) should fall outside the scope of Article 34 provided imported products enjoy equal access to the market compared with national goods: see, e.g., White (1989) 26 CMLRev 235 and Mortelmans’ addition (1991) 28 CMLRev 115.
2. Keck
The (partial) resolution of these difficulties came with the decision from Joined Cases C-267/91 and C-268/91 Keck and Mithouard [1993] ECR I-6097. The Court said:
14. In view of the increasing tendency of traders to invoke Article [34] of the Treaty as a means of challenging any rules whose effect is to limit their commercial freedom even where such rules are not aimed at products from other Member States, the Court considers it necessary to re-examine and clarify its case law on this matter.
15. ... in the absence of harmonisation of legislation, measures of equivalent effect prohibited by Article [34] include obstacles to the free movement of goods where they are the consequence of applying rules that lay down requirements to be met by such goods (such as requirements as to designation, form, size, weight, composition, presentation, labelling, packaging – [product requirements]) to goods from other Member States where they are lawfully manufactured and marketed, even if those rules apply without distinction to all products unless their application can be justified by a public interest requirement taking precedence over the free movement of goods”.
16. However, contrary to what has previously been decided, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder, directly or indirectly, actually or potentially, trade
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between Member States within the meaning of the Dassonville judgment (...) provided that those provisions apply to all affected traders operating within the national territory and provided that they affect in the same manner, in law and in fact, the marketing of domestic products and those from other Member States.
17. Where those conditions are fulfilled, the application of such rules to the sale of products from other Member States meeting the requirements laid down by that state is not by nature such as to prevent their access to the market or to impede access any more than it impedes the access of domestic products. Such rules therefore fall outside the scope of Article [34].
Therefore, overturning previous, unspecified case law, the Court has said that “certain selling arrangements” do not fall within the Dassonville formula and therefore fall right outside Article 34 provided two conditions are satisfied:
• those provisions apply to all affected traders operating within the national territory, and • that they affect in the same manner, in law and in fact, the marketing of domestic products and those from other Member States.
3. What are “certain sell ing arrangements”? Rules limiting the time at which goods can be sold:
• Opening hours of petrol stations (Cases C-401/92 & C402/93 Tankstation ‘t Heuksks vof and J.B.E. Boermans [1994] ECR I-2199);
• Sunday trading (Case C-69/93 & C-258/93 Punto Casa SpA v. Sindaco de Commune di Capena and others [1994] ECR I-2355 and more recently in Cases C-418 etc/93 Semeraro Casa [1996] ECR I-2975);
Rules regulating retailers:
• national legislation reserving the retail sale of tobacco products to authorized distributors: Case C-387/93 Banchero [1995] ECR I-4663; Case C-391/92 Commission v Greece [1995] ECR I-1621
• the prohibition on obtaining beverages from anyone other than a holder of a production or wholesale licence: Case C-189/95 Criminal Proceedings against Franzen [1997] ECR I-5909;
• Ban on itinerant sales without authorisation: Case C-20/03 Burmanjer [2005] ECR I-4133.
• Ban on selling in private homes (on the facts of the case low value items of silver jewellery): Case C-441/04 A-Punkt Schmuckhandels GmbH v. Schmidt [2006] ECR I-2093.
Restrictions on pricing:
• Resale at a loss : Keck
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• prohibition of sales yielding very low profit in Case C-63/94 Groupement National des Négociants en Pommes de Terre de Belgique v. ITM Belgium SA and Vocarex SA [1995] ECR I-2467
Restrictions on advertising:
• Restrictions on advertising outside pharmacies (Case C-292/92 Hünermund and others v. Landesapothekerkamrner Baden-Württemburg [1993] ECR I-6787);
• Case C-412/93 Leclerc-Siplec v TF1 Publicité [1995] ECR I-179 (advertising of fuel in supermarkets) (cf AG Jacob’s view – “direct and substantial hindrance of access to the market”) but contrast Cases C-1/90 and C-176/90 Aragonesa de Publicidad Exterior v Departamento de Sanidad y Seguridad Social [1991] ECR I-4151)
• Ban on information indicating that goods come from an insolvent estate when they no longer constitute part of that estate: Case C-71/02 Herbert Karner Industrie-Auktionen GmbH v. Troostwijk [2004] ECR I-3025, para.39.
As the Court put it in Case C-71/02 Herbert Karner Industrie-Auktionen GmbH v. Troostwijk [2004] ECR I-3025, para. 38:
The Court subsequently found provisions concerning inter alia the place and times of sale of certain products and advertising of those products as well as certain marketing methods to be provisions governing selling arrangements within the meaning of Keck and Mithouard.
However, in cases of uncertainty the Court favours classifying the measure as an MEE: Case C-368/95 Vereinigte Familapress Zeitungsverlags- und vertriebs GmbH ('Familiapress’) v Heinrich Bauer Verlag,[1997] ECR I-3689; Case C-244/06 Dynamic Medien [2008] ECR I-505.
D. Problem Areas
1. Discriminatory Certain Sell ing Arrangements
1.1 The Fixed (Static)/Dynamic Dist inction While most commentators accept the application of Keck to fixed selling situations, one stage removed from the importer (eg Sunday trading, opening hours of shops), most, including certain Advocate Generals, have been critical of the application of Keck to more dynamic situations including restrictions on advertising. Compare Case C-412/93 Leclerc-Siplec v TF1 Publicité [1995] ECR I-179 (advertising of fuel in supermarkets) with Cases C-1/90 and C-176/90 Aragonesa de Publicidad Exterior v Departamento de Sanidad y Seguridad Social [1991] ECR I-4151). See also AG Lenz in Case C-391/92 Commission v Greece [1995] ECR I-1621.
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1.2 Response to Crit icism
Joined Cases C-34/95, C-35/95 and C-36/95 Konsumentombudsmannen (KO) v De Agostini (Svenska) Förlag AB and TV-Shop i Sverige AB [1997] ECR I-3843 where the Court looked and applied the provisos in para.16 of Keck properly. Instead of assuming, as it had in the past, that all certain selling arrangements are non-discriminatory, it was prepared to recognise that some selling arrangements may have a disparate impact on the imported goods and so had to be considered under the Cassis formula.
42 …it cannot be excluded that an outright ban, applying in one Member State, of a type of promotion for a product which is lawfully sold there might have a greater impact on products from other Member States.
43 Although the efficacy of the various types of promotion is a question of fact to be determined in principle by the referring court, it is to be noted that in its observations De Agostini stated that television advertising was the only effective form of sales promotion enabling it to penetrate the Swedish market since it had no other advertising methods for reaching children and their parents.
44 Consequently, an outright ban on advertising aimed at children less than 12 years of
age and of misleading advertising, as provided for by the Swedish legislation, is not
covered by Article [34 TFEU], unless it is shown that the ban does not affect in the
same way, in fact and in law, the marketing of national products and of products from
other Member States.
45.In the latter case, it is for the national court to determine whether the ban is necessary to satisfy overriding requirements of general public importance or one of the aims listed in Article [36 TFEU] if it is proportionate to that purpose and if those aims or requirements could not have been attained or fulfilled by measures less restrictive of intra-[Union] trade.
Case C-254/98 Schutzverband gegen unlauteren Wettbewerb v. TK-Heimdienst Sass GmbH, [2000] ECR I-151 legislation that requires certain undertakings
‘who already have a permanent establishment in another Member State and who wish to sell their goods on rounds in a particular administrative district ... to set up or
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purchase another permanent establishment in that administrative district or in an adjacent municipality, whilst local economic operators already meet the requirement as to a permanent establishment. Consequently, in order for goods from other Member States to enjoy the same access to the market of the Member State of importation as domestic goods, they have to bear additional costs.’
1.3 Presumptions and burden of proof
Presumption of legality of certain selling arrangements (paras. 43 and 44 of De Agostini); trader must work hard to show (1) actual and (2) substantial disparate impact.
(a) Actual Disparate Impact
Case C-405/98 Konsumentombudsmannen (KO) v. Gourmet International Products (GIP) [2001] ECR I-1795 (total ban on advertising for alcoholic drinks in Sweden found to put imported products at a disadvantage because local drinks are better known by the public and have other channels of publicity).
Case C-322/01 Deutscher Apothekerverband eV v. 0800 DocMorris NV [2003] ECR I-14887. A prohibition such as that at issue in the main proceedings is more of an obstacle to pharmacies outside Germany than to those within it. Although there is little doubt that as a result of the prohibition, pharmacies in Germany cannot use the extra or alternative method of gaining access to the German market consisting of end consumers of medicinal products, they are still able to sell the products in their dispensaries. However, for pharmacies not established in Germany, the internet provides a more significant way to gain direct access to the German market. A prohibition which has a greater impact on pharmacies established outside German territory could impede access to the market for products from other Member States more than it impedes access for domestic products.
(b) Substantial Disparate Impact
Case C-20/03 Burmanjer [2005] ECR I-4133:
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31 However, the information available to the Court does not enable it to establish with certainty whether the national rules on itinerant sales affect the marketing of products from Member States other than the Kingdom of Belgium to any greater degree than that of products from that State. Nevertheless, it seems to follow from the information in the file transmitted to the Court that, if those rules did have such an effect, it would be too insignificant and uncertain to be regarded as being such as to hinder or otherwise interfere with trade between Member States.
(c) Ker Optika
Case C-108/09 Ker-Optika [2010] ECR I-000:
49 Accordingly, measures adopted by a Member State the object or effect of which is to treat products coming from other Member States less favourably are to be regarded as measures having an effect equivalent to quantitative restrictions, as are rules that lay down requirements to be met by such goods, even if those rules apply to all products alike (see Commission v Italy, paragraphs 35 and 37).
50 Any other measure which hinders access of products originating in other Member States to the market of a Member State is also covered by that concept (Commission v Italy, paragraph 37).
51 For that reason, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is such as to hinder directly or indirectly, actually or potentially, trade between Member States for the purposes of the case-law flowing from Dassonville, unless those provisions apply to all relevant traders operating within the national territory and affect in the same manner, in law and in fact, the selling of domestic products and of those from other Member States. The application of such rules to the sale of products from another Member State meeting the requirements laid down by that State is by nature such as to prevent their access to the market or to impede such access more than it impedes the access of domestic products (see, to that effect, Joined Cases C-267/91 and C-268/91 Keck and Mithouard [1993] ECR I-6097, paragraphs 16 and 17, and Commission v Italy, paragraph 36).
52 Accordingly, it is necessary to examine whether the national legislation at issue in the main proceedings meets the two conditions stated in the preceding paragraph of this judgment, in other words, whether it applies to all relevant traders operating within the national territory and whether it affects in the same manner, in law and in fact, the selling of domestic products and the selling of those from other Member States.
53 As regards the first condition, it is clear that the legislation applies to all relevant traders involved in selling contact lenses, which means that that condition is satisfied.
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54 As regards the second condition, it is undisputed that the prohibition on the selling of contact lenses via the Internet applies to contact lenses from other Member States which are sold by mail order and delivered to the home of customers resident in Hungary. It is clear that the prohibition on selling contact lenses by mail order deprives traders from other Member States of a particularly effective means of selling those products and thus significantly impedes access of those traders to the market of the Member State concerned (see, by analogy, in relation to medicinal products, Deutscher Apothekerverband, paragraph 74).
55 In those circumstances, that legislation does not affect in the same manner the selling of contact lenses by Hungarian traders and such selling as carried out by traders from other Member States.
56 It follows that that legislation constitutes a measure having an effect equivalent to a quantitative restriction, as prohibited by Article 34 TFEU, unless that legislation can be objectively justified.
2. Non-discriminatory Certain Sell ing Arrangements
2.1 Genuinely Non-discriminatory
Cf those rules which do not discriminate: Case C-71/02 Herbert Karner Industrie-Auktionen GmbH v. Troostwijk [2004] ECR I-3025:
40. As is clear from Keck and Mithouard, however, such a selling arrangement cannot escape the prohibition laid down in Article [34] unless it satisfies the two conditions set out in paragraph 37 of this judgment.
41. As regards the first of those conditions, Paragraph 30(1) of the UWG applies without distinction to all the operators concerned who carry on their business on Austrian territory, regardless of whether they are Austrian nationals or foreigners.
42. As regards the second condition, Paragraph 30(1) of the UWG, contrary to the national provisions which gave rise to Joined Cases C-34/95 to C36/95 De Agostini and TV-Shop [1997] ECR I-3843 and to Case C405/98 Gourmet International Products [2001] ECR I-1795, does not lay down a total prohibition on all forms of advertising in a Member State for a product which is lawfully sold there. It merely prohibits any reference, when a large number of people are targeted, to the fact that goods originate
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from an insolvent estate if those goods no longer constitute part of the insolvent estate, on grounds of consumer protection. Although such a prohibition is, in principle, likely to limit the total volume of sales in that Member State and, consequently, also to reduce the volume of sales of goods from other Member States, it nevertheless does not affect the marketing of products originating from other Member States more than it affects the marketing of products from the Member State in question. In any event, there is no evidence in the file forwarded to the Court by the national court to permit a finding that the prohibition has had such an effect.
43. In those circumstances, as the Advocate General stated in paragraph 66 of his Opinion, it must be held that the two conditions laid down by Keck and Mithouard, cited above, and referred to in paragraph 37 of this judgment, are fully satisfied in the case in the main proceedings. Accordingly, a national provision such as Paragraph 30(1) of the UWG is not caught by the prohibition in Article [34].
2.2 Non-discriminatory sell ing arrangements which prevent or substantial ly hinder access to the market
Karner concerned a non-discriminatory ban which did not prevent or hinder market access (see para. 42). What about those that do?
(a) Case law from free movement of persons
See Case C-384/93 Alpine Investments [1995] ECR I-1141; Case C-275/92 Customs v Excise v Schindler [1994] ECR 1039 by analogy. A test based on “direct and substantial hindrance of access to the market” or remoteness? See Case C-415/93 Bosman [1995] ECR I-4921 and Case C-384/93 Alpine Investments [1995] ECR I-1141 The prohibition breached Article 56 since it: “directly affects access to the markets in services in the other Member States and is thus capable of hindering intra-[Union] trade in services” by analogy and Weatherill, “After Keck: Some thoughts on how to clarify the clarification” (1996) 33 CMLRev 885; Barnard, “Fitting the remaining Pieces in the Goods and Services Jigsaw?” (2001) 26 ELRev 35
If however, there is no substantial hindrance of access to the market then there should be no breach of Article 30, as Case C-190/98 Graf v. Filzmozer Maschinenbau GmbH [2000] ECR I-493 indicates by analogy. The Court said that the Austrian law was genuinely non-discriminatory and that:
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... it was not such as to preclude or deter a worker from ending his contract of employment in order to take a job with another employer, because the entitlement to compensation on termination of employment is not dependent on the worker’s choosing whether or not to stay with his current employer but on a future and hypothetical event, namely the subsequent termination of his contract without such termination being at his own initiative or attributable to him. Such an event is too uncertain and indirect a possibility for legislation to be capable of being regarded as liable to hinder free movement for workers where it does not attach to termination of a contract of employment by the worker himself the same consequence as it attaches to termination which was not at his initiative or is not attributable to him” (citing inter alia, the goods case, Case C-69/88 Krantz v Ontvanger der Directe Belastingen [1990] ECR I-583, paragraph 11)
(b) The market access approach
Effect of Case C-110/05 Commission v. Italy (trailers) [2009] ECR I-000
37: ‘Any other measure which hinders access of products originating in other Member States to the market of a Member State’.
…
56 It should be noted in that regard that a prohibition on the use of a product in the territory of a Member State has a considerable influence on the behaviour of consumers, which, in its turn, affects the access of that product to the market of that Member State.
57 Consumers, knowing that they are not permitted to use their motorcycle with a trailer specially designed for it, have practically no interest in buying such a trailer (see, by analogy, Case C-265/06 Commission v Portugal [2008] ECR I-0000, paragraph 33, concerning the affixing of tinted film to the windows of motor vehicles). Thus, Article 56 of the Highway Code prevents a demand from existing in the market at issue for such trailers and therefore hinders their importation.
58 It follows that the prohibition laid down in Article 56 of the Highway Code, to the extent that its effect is to hinder access to the Italian market for trailers which are specially designed for motorcycles and are lawfully produced and marketed in Member States other than the Italian Republic, constitutes a measure having equivalent effect to
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quantitative restrictions on imports within the meaning of Article [30 TFEU], unless it can be justified objectively.
59 Such a prohibition may be justified on one of the public interest grounds set out in Article [36 TFEU] or in order to meet imperative requirements (see, in particular Case C-420/01 Commission v Italy [2003] ECR I-6445, paragraph 29, and Case C-270/02 Commission v Italy [2004] ECR I-1559, paragraph 21). In either case, the national provision must be appropriate for securing the attainment of the objective pursued and not go beyond what is necessary in order to attain it (Case C-54/05 Commission v Finland [2007] ECR I-2473, paragraph 38, and Case C-297/05 Commission v Netherlands [2007] ECR I-7467, paragraph 75).
2.3 Ban/Restrict ion on Use or Activity
See Case C-110/05 Commission v. Italy (trailers) [2009] E.C.R I-000 ‘a prohibition on the use of a product in the territory of a Member State has a considerable influence on the behaviour of consumers, which, in its turn, affects the access of that product to the market of that Member State’; Case C–142/05 Åklagaren v. Mickelsson [2009] ECR I-000.
2.4 The slow death of Keck
Case C-110/05 Commission v. Italy (trailers) [2009] ECR I-000; Case C-108/09 Ker-Optika [2010] ECR I-12213:
For that reason, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is such as to hinder directly or indirectly, actually or potentially, trade between Member States for the purposes of the case-law flowing from Dassonville, unless those provisions apply to all relevant traders operating within the national territory and affect in the same manner, in law and in fact, the selling of domestic products and of those from other Member States. The application of such rules to the sale of products from another Member State meeting the requirements laid down by that State is by nature such as to prevent their access to the market or to impede such access more than it impedes the access of domestic products (see, to that effect, Joined Cases C-267/91 and C-268/91 Keck and Mithouard [1993] ECR I-6097, paragraphs 16 and 17, and Commission v Italy, paragraph 36).
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E. Article 35 Free Movement of Exports
Article 35 (ex Article 29) provides:
Quantitative restrictions on exports and all measures having equivalent effect shall be prohibited between Member States.
Original need for measure to be discriminatory: Case 15/79 Groenveld v. Produktschap voor Vee en Vlees [1979] ECR 3409 where the Court said that Article 35:
concerns the national measures which have as their specific object or effect the restriction on the patterns of export and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade in such a way as to provide a particular advantage for national production or for the domestic market of the state in question at the expense of the production or of the trade of other Member States.
Cf effect of Case C-205/07 Gysbrechts and Santurel Inter BVBA [2008] ECR I-9947:
40 In that regard, the Court has classified as measures having equivalent effect to quantitative restrictions on exports national measures which have as their specific object or effect the restriction of patterns of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade in such a way as to provide a particular advantage for national production or for the domestic market of the State in question, at the expense of the production or of the trade of other Member States (Case 15/79 Groenveld [1979] ECR 3409, paragraph 7).
41 In the main proceedings, it is clear, as the Belgian Government has moreover noted in its written observations, that the prohibition on requiring an advance payment deprives the traders concerned of an efficient tool with which to guard against the risk of non-payment. That is even more the case when the national provision at issue is interpreted as prohibiting suppliers from requesting that consumers provide their payment card number even if they undertake not to use it to collect payment before expiry of the period for withdrawal.
42 As is clear from the order for reference, the consequences of such a prohibition are generally more significant in cross-border sales made directly to consumers, in particular, in sales made by means of the internet, by reason, inter alia, of the obstacles to bringing any legal proceedings in another Member State against consumers who default, especially when the sales involve relatively small sums.
43 Consequently, even if a prohibition such as that at issue in the main proceedings is applicable to all traders active in the national territory, its actual effect is none the less greater on goods leaving the market of the exporting Member State than on the marketing of goods in the domestic market of that Member State.
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44 It must therefore be held that a national measure, such as that at issue in the main proceedings, prohibiting a supplier in a distance sale from requiring an advance or any payment before expiry of the period for withdrawal constitutes a measure having equivalent effect to a quantitative restriction on exports. The same is true of a measure prohibiting a supplier from requiring that consumers provide their payment card number, even if the supplier undertakes not to use it to collect payment before expiry of the period for withdrawal.
The possible justification of the measure having equivalent effect
45 A national measure contrary to Article [35] may be justified on one of the grounds stated in Article [36], and by overriding requirements of public interest, provided that the measure is proportionate to the legitimate objective pursued.
SEMINAR 1: Questions for discussion 1. How is similarity determined in the context of Article 110 TFEU?
2. What is meant by a charge having equivalent effect to a customs duty and a measure having equivalent effect to a quantitative restriction?
3. What is the effect of the Cassis de Dijon case? What is the relationship between the “mandatory requirements” identified in Cassis and the public policy limitations contained in Article 36 TFEU.
4. The Commission is considering the possibility of initiating the administrative stage of the enforcement procedure under Article 258 TFEU (ex Art. 226 EC), in respect of the following:
(a) Legislation has been enacted in France, prohibiting the sale of salmon from Scotland on the ground that certain Scottish fish farms are known to have been infected by a variety of water-borne diseases. Similar diseases have, from time to time, broken out on fish farms in France.
(b) On learning of the action taken by the French Government, the newly constituted Scottish Parliament enacts legislation:
(i) requiring all salmon imported into Scotland, including from the rest of the United Kingdom, to be subjected to health inspections, the cost of which is to be recovered by a levy payable by the importer;
(ii) requiring all farmed salmon that is sold in Scotland to be packaged in cube-shaped containers, identifying the place where it was produced;
[(iii) banning all advertising of salmon on any Scottish media.
(c) Scottish fish farmers have formed a group, Save Our Salmon (‘SOS’), which is launching a series of lightning attacks on vehicles or boats importing salmon from
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France into Scotland. The police have investigated such cases but have yet to prosecute any of the farmers involved.
Advise the Commission.
You may assume for the purposes of your advice that the measures referred to under (b) are within the competence of the Scottish Parliament. You may also assume that there is no EU legislation in force which is relevant, and the law is to be found in the provisions of the EU Treaties, as interpreted by the Court of Justice.
5. “Not only may imported products not be taxed more heavily than similar domestic products, they may not be taxed in such a way as to afford protection to a competing domestic product.”
Discuss the application of this principle by the Court of Justice.
6. A coalition Government dominated by the Extremely Green Party comes to power in Sweden and immediately secures the enactment of legislation which, among other things:
(i) lays down, for the buses operated by Swedish public authorities, a set of strict technical requirements which, in practice, no vehicles manufactured outside Sweden fulfil;
(ii) requires the packaging used for all products manufactured in Sweden to be recyclable, and to bear the words (in Swedish), “This packaging is environmentally responsible”;
(iii) imposes, to help finance the environmental programme, a charge applicable to all consumer products marketed in Sweden, but which is to be levied at a higher rate on products contained in non-recyclable packaging.
Advise a group of Swedish and German industrialists as to:
(a) the compatibility with the EU Treaties of the provisions described under (i) to (iii) above;
(b) the steps individuals may take, under EU law, to protect their interests threatened by those provisions.
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G. Reading
Basic:
Barnard, Chapters 4-6.
Further:
Arnull, “What shall we do on Sunday?” (1991) 16 ELRev 112
*Weatherill, “After Keck: Some thoughts on how to clarify the clarification” (1996) 33 CMLRev 885
Barnard, “Fitting the Remaining Pieces in the Goods and Services Jigsaw?” (2001) 26 ELRev 35
*Barnard, ‘Restricting Restrictions: Lessons for the EU from the US’ (2009) 68 CLJ 563.
*Oliver and Enchelmaier, ‘Free Movement of Goods: Recent Developments in the Case Law’ (2007) 44 CMLRev. 649, esp 671-683
Poiares Maduro, “Keck: the end? Or just the end of the beginning?” (1994) Irish J of Eur Law 33
Poiares Maduro, ‘Reforming the Market or the State? Article 30 and the European Constitution: Economic Freedom and Political Rights (1997) 3 ELJ 55
Reich, ‘The November revolution of the European Court of Justice: Keck, Meng and Audi revisited’ (1994) 31 CMLRev 459.
E.Spaventa ‘On Discrimination and the Theory of Mandatory Requirements’ (2001) 3 CYELS 457
E. Spaventa, ‘The Outer Limits of the Treaty Free Movement Provisions: Some Reflections on the Significance of Keck, Remoteness and Deliège’ in C.Barnard and O.Odudu, The Outer Limits of European Union Law (Oxford, Hart Publishing, 2009).
*Weatherill, “Recent case law on free movement of goods” (1999) 36 CMLRev 51
White, “In search of the limits of Article 30 of the EEC Treaty” (1989) 26 CMLRev 235
Wils, “The search for the rule in Article 30 EEC: much ado about nothing?” (1993) 18 ELRev 475
3
Negative integration: the abolition of customs duties and charges having equivalent effect (Articles 28 and 30 TFEU) as well as the prohibition of discriminatory taxation (Article 110 TFEU) and state aids (Article 107 TFEU). EU Law has also gone further than classical economic theory focused on FTAs and CUs might expect by also prohibiting the use of non-tariff barriers, i.e., quantitative restrictions which, in welfare terms can be just as damaging to free trade without the revenue producing benefits, and measures having equivalent effect (Articles 34 and 35 TFEU). It also prohibits anti competitive behaviour by private actors which might attempt to resurrect barriers to trade which partition the market on national lines (Articles 101 and 102 TFEU; ex 81 and 82 EC). The need for positive integration. Role of Articles 114 (ex 95 EC), 115 (ex 94 EC) and 352 (ex 308 EC) TFEU.
2. Single Market/Common Market
2.1 Common Market
Article 3 TEU discusses the EU’s purpose, with paragraph 2 being particularly relevant to EU Trade law: “The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.”
[The old Article 2 EU talked of the Community having as its task “by establishing a common market and an economic and monetary union and by implementing common policies or activities referred to in Articles 3 and 4, to promote throughout the Community a harmonious, balanced and sustainable development of economic activities”.]
2.2 Principles underpinning the Common Market
(a) Decentralisation
Non-discrimination model: this model presupposes that domestic and imported goods, and national and migrant persons, services and capital are similarly situated and that they should be treated in the same way.
Problems with the non-discrimination model. Shift to indirect discrimination model and then beyond to market access approach: see e.g. Case C-55/94 Gebhard v. Consiglio dell’Ordine degli Avvocati e Procuratori di Milano [1995] ECR I-4165, para. 37, citing Case C-19/92 Kraus v. Land Baden-Württemberg [1993] ECR I-1663, para. 32; Case C-76/90 Säger v. Dennemeyer
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