European Union Law : Free Movement of Goods within Europe

EU solidarity

The broad concept of EU solidarity is said to be the underlying aspiration of the integration of the people of Europe and is guaranteed by the following freedoms:

Central to the European Union is the concept of unification of nations with the emphasis representing recognition of the autonomy of individual states.

Free Movement of Goods & the Internal Market

Article 28 & 29 of the EC Treaty

Articles 28 and 29 of the Treaty establishing the European Community prohibit import and export restrictions between Member States. Therefore goods are able to be moved from Member State to Member State without restriction creating what is termed the internal market.

The internal market is the market within the European Union, a market not based simply on the individual Member States but across all Member States.

Common Standards

Following the abolition of import and export restrictions between Member States manufacturers of goods all work to the same common standards which are accepted throughout the European Union.

This mutual acceptance of testing and certification means that goods only need to be certified in one Member State for them to be accepted across all Member States.

This also means that it is impossible for individual Member States to impose restrictions over and above what is required as the European Standard. This means that manufacturers can now produce their goods to a certain specification safely in the knowledge that they will be accepted throughout the European Union.

An example of a Member State which imposed higher standards than the rest of Europe in relation to a product was the old German law concerning beer and what chemicals could be used in the processing of beer. Beer containing certain chemicals was thus banned from being sold on the German market. This law is now in violation of the free movement of goods meaning that beer produced all over Europe can now be sold on the German market.

There may be slight issues concerning the language on the packaging when selling products in another Member State but this is a product which can be overcome relatively easily.

Benefit for Consumers

Differing tax rates in various Member States has the effect of either discouraging consumers to purchase products in another country rather than in their own Member State. For example it is common for people in the UK to travel to France in order to purchase high quantities of alcohol taking advantage of the lower excise duties.

Consumers are able to do this in relation to goods that are for their own personal use.

Countries with the higher excise tax are resistant to this benefit for consumers and wish to make illegal but as we currently the ability to purchase goods in this manner is guaranteed by the freedoms of the European Union.

With the way the internet has revolutionised the way we shop it is making it increasingly easy for consumers to purchase products from other Member States.

Branded Goods

Manufacturers who produce branded goods try to control the prices to the end consumer by selling them though designated merchants. The internal market causes issues for them as it has enabled middle-men to purchase high value goods in markets where the value is less and then sell them on in other Member States where the price controlled by the manufacturers is much higher.

So far the European Court of Justice has stated that manufacturers do not have the ability to stop this kind of practice as it would be contrary to the free movement of goods.

How is the Free Movement of Goods protected?

Directorate General for Enterprise and Industry

The Directorate General for Enterprise and Industry is put in place by the European Union in order to contribute to the design, implementation and improvement of regulatory policy in order to make the Single Market work better by removing existing barriers to trade and avoiding the creation of new ones.

The Directorate General has the following specific tasks to undertake:

  • Monitor new legislative proposals by Member States which may cause technical barriers
  • Ensure that Member States do not create barriers or maintain barriers to intra community trade – relying of Articles 28 – 30 EC Treaty.
  • Enacting specific secondary legislation in relation to certain products
  • Enacting specific secondary legislation in relation to such questions as tackling late payment in commercial transactions
  • Monitoring the application of Community Law

All the above initiatives have the aim of producing a business and consumer friendly internal market.

Application of Anti-Competitive Legislation

Agreements to prevent parallel imports between Member States are expressly stated to fall foul of Article 81 EC which prohibits anti-competitive agreements between parties.

Conduct by a company occupying a dominant position on the market which effectively prohibits parallel imports between Member States will be seen as an abuse of that dominant position.