Free Movement Of Goods And Services Notes
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EU Law Reading Session 6 (Seminar 1- Free movement of Goods and Services) General Reading Craig and de Burca FORMS OF ECONOMIC INTEGRATION
⇒ Part Three of the EC Treaty contains many of the fundamental principles for establishing a customs union & common market. Sets out 'four freedoms:' free movement of goods, workers, establishment and provision of services & capital. These Articles have social as well as economic objectives.
⇒ Basic economic aim = optimal allocation of resources for the Community as a whole.
⇒ Provisions on the free movement of goods = designed to establish the principles of a customs union. Object = to ensure that goods can move freely, with the consequence that those most favoured by consumers will be the most successful, irrespective of country of origin. Will also serve to maximise the wealth-creation in C as a whole. TECHNIQUES OF ECONOMIC INTEGRATION
⇒ 2 principal techniques that can be used to attain a single market:
1.) C law can prohibit national rules that hinder cross-border trade, either because they discriminate against goods, labour etc, from other MS or because they render it more difficult for them to secure access to the market of the other State.
= the classic way in which the TAs concerning the four freedoms operate. Approach =
essentially negative & deregulatory EC law prohibits national rules that hinder cross-boarder trade.
Approach = enforced through 'mutual recognition:' requires a MS to accept, subject to certain exceptions, goods that have been made in accordance with the rules of another MS.
2.) Positive integration:
Barriers may flow from diversity in national rules, e.g. on matters like health, safety, technical specification & these may be overcome by mutual recognition.
Otherwise they could be overcome by harmonization of diverse national laws by means of a C directive positive integration. Attained principally through Articles 94 & 95 EC & the other more sector-specific TAs.
⇒ Big problem with ensuring the passage of harmonization = the requirement of unanimity under Article 94 (ex Article 100).
⇒ So Article 95(1) reads:
1. By way of derogation from Article 94 and save where otherwise provided in this Treaty, the following provisions shall apply for the achievement of the objectives set out in Article 14. The Council shall, acting in accordance with the procedure referred to in Article 251(QMV) and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.
⇒ Should be noted that where Article 94 only authorises the passage of directives, Art 95 empowers the Council to pass measures, which includes directives but also regulations. Also should be noted that whereas Article 94 simply requires that the EP be consulted, Art 95(1) gives it a greater say in making the measures subject to the co-decision procedure of Article
⇒ 95 is also a residual provision. Operates only 'save where otherwise provided in this Treaty.' This means that other, more specific TPs such as Arts 37, 44, 47 and 71 should be used for measures designed to attain the internal market where they fall within the subject matter of those Articles. This can generate boundary-dispute problems about the correct legal basis for C legislation. Those sort of disputes have arisen in the past because EP wanted to ensure that its legislative rights under 95 weren't by-passed by legislation enacted on a different TA, which gave it less extensive rights in the legislative process.
⇒ General test used by ECJ to solve such disputes = regard should be had to the nature, aim &
content of the act in question. Where these factors indicated that the measure was concerned with more than one area of T, then it might be necessary to satisfy the legal requirements of two TAs. However, boundary disputes are less likely to occur now, because the legislative procedure applicable for many TAs is co-decision.
⇒ Limits of Art 95:
Article is broadly framed, but the ECJ in Tobacco Advertising confirmed that there are limits to it. ECJ struck down a directive designed to harmonize the law relating to the advertising &
sponsorship of tobacco products. Read Art 95 in light of Art 3(1)(c) & 14 & concluded that the measures must be intended to improve the conditions for the establishment & functioning of the internal market.
Art 95 didn't, as argued by C, C & EP, give any general power of market regulation. According to the ECJ, this would be contrary to Arts 3(1)(c) & 14 & incompatible with the principle in Art 5 that C's powers were limited to those specifically conferred upon it.
ECJ held that a measure enacted pursuant to Art 95 must genuinely have as its object the improvement of the conditions for the establishment & functioning of the internal market. If random disparities between national rules & the abstract risk of obstacles to the exercise of fundamental freedoms or distortions of competition could justify the use of 95, then JR of compliance with the proper legal basis would be rendered 'nugatory.'
While there are ∴ limits to the use of 95, subsequent case law shows that the ECJ is willing to accept the use of Art 95 as the legal basis for the enacted measure. Particularly evident in the 2006 Tobacco Advertising case, where the ECJ upheld the validity of a revised directive on tobacco advertising, which included prohibitions about advertising in the press & radio. Court
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