Seton Hall Law
McCauliff
European Union Law Fall 2017
Week 1
The European Single Market and the Four Freedoms
The European Single Market, Internal Market or Common Market is a single market which seeks to guarantee the free movement of (1) goods, (2) capital, (3) services, and (4) labour – the “four freedoms” – within the European Union (EU). The market encompasses the EU’s 28 member states, and has been extended, with exceptions, to Iceland, Liechtenstein and Norway through the Agreement on the European Economic Area and to Switzerland through bilateral treaties. Through the Deep and Comprehensive Free Trade Area (DCFTA), three post-Soviet countries Georgia, Moldova and Ukraine were given access to the “four freedoms” of the Single Market. Movement of people however, is in form of visa free regime for short stay travel, while movement of workers remains within the remit of the EU member states. Turkey has access the free movement of goods via its membership in the European Union Customs Union.
Free Movement of Goods
The European Union is also a customs union. This means that member states have removed customs barriers between themselves and introduced a common customs policy towards other countries. The overall purpose of the duties is “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”. By agreement between the Union and the states concerned, Andorra, Monaco, San Marino and Turkey also participate in the EU Customs Union
Custom Duties
Article 30 TFEU prohibits member states from levying any duties on goods crossing a border and covers both goods produced within the EU and those produced outside. Once a good has been imported into the EU from a third country and the appropriate customs duty paid, Article 29 TFEU dictates that it shall then be considered to be in free circulation between the member states.Neither the purpose of the charge, nor its name in domestic law, is relevant.[19] Since the Single European Act, there can be no systematic customs controls at the borders of member states. The emphasis is on post-import audit controls and risk analysis. Physical controls of imports and exports now occur at traders’ premises, rather than at the territorial borders.
Charges having Equivalent Effect to Customs Duties
Article 30 of the TFEU prohibits not only customs duties but also charges having equivalent effect. The European Court of Justice defined “charge having equivalent effect” in Commission v Italy.
[A]ny pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect… even if it is not imposed for the benefit of the state, is not discriminatory or protective in effect and if the product on which the charge is imposed is not in competition with any domestic product.[20]
A charge is a customs duty if it is proportionate to the value of the goods; if it is proportionate to the quantity, it is a charge having equivalent effect to a customs duty. There are three exceptions to the prohibition on charges imposed when goods cross a border, listed in Case 18/87 Commission v Germany. A charge is not a customs duty or charge having equivalent effect if:
it relates to a general system of internal dues applied systematically and in accordance with the same criteria to domestic products and imported products alike,[22]
if it constitutes payment for a service in fact rendered to the economic operator of a sum in proportion to the service,[23] or
subject to certain conditions, if it attaches to inspections carried out to fulfil obligations imposed by Union law
Taxation
Article 110 of the TFEU provides that “No Member shall impose, directly or indirectly, on the products of other member states any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products. Furthermore, no member State shall impose on the products of other member states any internal taxation of such a nature to afford indirect protection to other products.
Free Movement of Capital
Free movement of capital was traditionally seen as the fourth freedom, after goods, workers and persons, services and establishment. The original Treaty of Rome required that restrictions on free capital flows only be removed to the extent necessary for the common market. From the Treaty of Maastricht, now in TFEU article 63, “all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited”. This means capital controls of various kinds are prohibited, including limits on buying currency, limits on buying company shares or financial assets, or government approval requirements for foreign investment. By contrast, taxation of capital, including corporate tax, capital gains tax and financial transaction tax, are not affected so long as they do not discriminate by nationality
Freedom to Establish and Provide Services
As well as creating rights for “workers” who generally lack bargaining power in the market, the Treaty on the Functioning of the European Union also protects the “freedom of establishment” in article 49, and “freedom to provide services” in article 56.
The “freedom to provide services” under TFEU article 56 applies to people who provide services “for remuneration”, especially commercial or professional activity.
Free Movement of Persons and Workers
Since its foundation, the Treaties sought to enable people to pursue their life goals in any country through free movement.[106] Reflecting the economic nature of the project, the European Community originally focused upon free movement of workers: as a “factor of production”.[107] However, from the 1970s, this focus shifted towards developing a more “social” Europe.[108] Free movement was increasingly based on “citizenship”, so that people had rights to empower them to become economically and socially active, rather than economic activity being a precondition for rights. This means the basic “worker” rights in TFEU article 45 function as a specific expression of the general rights of citizens in TFEU articles 18 to 21. According to the Court of Justice, a “worker” is anybody who is economically active, which includes everyone in an employment relationship, “under the direction of another person” for “remuneration.
Beyond the right of free movement to work, the EU has increasingly sought to guarantee rights of citizens, and rights simply by being a human being. But although the Court of Justice stated that ‘Citizenship is destined to be the fundamental status of nationals of the Member States’,[124] political debate remains on who should have access to public services and welfare systems funded by taxation. In 2008, just 8 million people from 500 million EU citizens (1.7 per cent) had in fact exercised rights of free movement, the vast majority of them workers. According to TFEU article 20, citizenship of the EU derives from nationality of a member state. Article 21 confers general rights to free movement in the EU and to reside freely within limits set by legislation. This applies for citizens and their immediate family members. This triggers four main groups of rights: (1) to enter, depart and return, without undue restrictions, (2) to reside, without becoming an unreasonable burden on social assistance, (3) to vote in local and European elections, and (4) the right to equal treatment with nationals of the host state, but for social assistance only after 3 months of residence.
The market is intended to be conducive to increased competition, increased specialisation, larger economies of scale, allowing goods and factors of production to move to the area where they are most valued, thus improving the efficiency of the allocation of resources. It is also intended to drive economic integration whereby the once separate economies of the member states become integrated within a single EU-wide economy. Half of the trade in goods within the EU is covered by legislation harmonised by the EU.[7] The creation of the internal market as a seamless, single market is an ongoing process, with the integration of the service industry still containing gaps.[8
ituents not otherwise recognized, politicians provide bad solutions which have no possibility of actually addressing those constituents’ needs. By focusing on immigrants as a problem instead of helping both immigrants and those left behind by poverty and a changing job market, populists may make their constituents feel better about themselves and their “right to belong” in their country. These poor politicians will neither feed their constituents and their hungry children today (by increasing the basic welfare stipends) nor help them obtain skills for new jobs in the factories of the future where they may need the mathematical literacy than brawn to fix the software program of the stuck arm of a robot.
The Meteoric Rise and Partial Fall of the EU Charter’s Promise:
The Universal Declaration of Human Rights was proclaimed in 1948, and all Member States signed the European Convention on Human Rights drafted in 1950 under the auspices of the Council of Europe If Maritain was deeply involved in getting the Declaration safely launched, Schuman was doing similar work to launch the institutions which would administer the rights and duties of the new Europe. Meanwhile, Germany, France and Italy had themselves written new constitutions after the war, guaranteeing individual human rights. Member States expressed their worry that EU officials would not protect the rights EU Member States’ citizens enjoyed.
The CJUE was thereupon inspired by the Member States’ traditions in the area of rights to create its own rights. During the early 1970s, the CJUE stated it would protect fundamental rights as part of the EU legal order, especially because one very sensitive point was the conflict between Member States’ constitutional rights and EU law. Thus the CJUE upholds important EU human rights but they are not absolute so that public interest exceptions not disturbing “the substance” of those rights are allowed.
One of the essential questions to ask when an official, European, North/South American, African or Asian, acts is whether his/her actions are subject/not subject to due process considerations. For some time therefore lawyers have set forth the fundamental rights embedded in the interstices of legal actions, in the EU, including regulations, directives and other secondary legislation. The worst case scenario, and the literature does not set this forth as even an alt reality, is that Member States desiring to pre-empt from their citizens or residents’ constitutional or fundamental rights they have sworn to uphold are happy to argue that EU law cannot interfere by adding EU rights to the rights their residents have from the Member States. The CJUE would therefore have no jurisdiction to remedy the wrong or harm the Member State is perpetrating.
According to one Advocate General, respect for fundamental rights is intrinsic to the EU legal order, giving rise at least to conventional judicial review, examining whether Member States provide the level of protection to fulfill their other obligations as members of the EU. Beyond that, without the murky jurisdictional limitation in Article 51 of the Charter, judicial review would extend to any national measure in the light of fundamental rights. But, with Article 51, only a serious violation is deemed to affect free movement. Those who do not fall under the competence of the CJUE may have recourse to the European Court of Human Rights.
