The Court of Justice Approach to Free Trade

The Court of Justice Approach to Free Trade
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The European Union's Court of Justice has sought to balance between free trade within the European Union and the need to respect the autonomy of the member states. The Court of Justice has used articles 30 TFEU and article 110 TFEU in order to achieve this end (Akkermans, 2013). This paper seeks to explore how the Court of Justice has employed the two articles in its attempt to promote free trade in the Union while at the same time respect the independence of the target countries and protect the local businesses within them. Indeed the Court of justice has been able to address concerns about the issues arising from trade by applying the two articles. Several disputes have already been decided upon by the court with some cases still ongoing (Larobina & Pate, 2011). In the paper, the two articles will be discussed individually while applying some of the cases already decided in order to put the courts application of the two articles into context.
Frederic Bastiat, a French philosopher, statesman and economist observed that when goods do not cross borders, the soldiers would (Haukeland, 2012). Using the philosophy put forth by Frederic, it is vital to understand the importance that the EU places on the free trade of goods and services across its member countries. The free movement of goods in the EU is affected by the several barriers, which are addressed under the EU laws (Messerlin, 2011). Messerlin observes that some of the barriers are fiscal barriers, which concerns itself with the imposition of custom duties and adoption of discriminatory internal taxation regimes. He continues on to state that the fiscal barriers work by imposing levies, taxes and other charges, which makes imports into such a country more expensive while placing local products at an advantage. Other barriers are non-fiscal which are quantitative restrictions and measures that do not take the form of taxes, but makes imports more difficult to enter the market (Messerlin, 2011). The imposition of such barriers does not necessarily mean that the countries intended to restrict trade. The paper will discuss the two types of fiscal barriers to trade, which is the abolition of custom duties covered by article 30 TFEU, and the prohibition of discriminatory internal taxation, which is covered by article 110 TFEU.
Abolition of Custom Duties – Article 30 TFEU
Article 30 TFEU states that custom duties on importing and exporting of products and services shall be waived between member states (Thygesen, 2013). Thygesen observes that the article goes on to state that the prohibition shall apply to the custom duties of a fiscal nature. This article refers to two concepts, which includes those custom duties and the charges that have the equivalent of the custom duties (Larobina & Pate, 2011). In the application of this article, it is important to consider how the concept of custom duty is defined. It is, therefore, important to put into focus the effect of such custom charges and not what the charges are intended for. The following two cases will bring this concept into focus.
Sociaal Fonds Voor de Diamantarbeiders v SA Ch Brachfeld & Sons
The case was brought about because the Belgian government had imposed charges on all diamonds that were imported into the country. The government had intended that the proceeds gained from the charges were to be forwarded into a social fund that would ultimately benefit the workers in the diamond industry. The Belgian government argued that because the proceeds would not go to the government, the charge was not customs duty (Leistner, 2014).
Commission v Italy
In this case, the government of Italy sought to curtail the number of treasures in the form of art that were being exported out of the country. The government imposed a customs duty on the exportation of art pieces in order to achieve that end. The commission in its case against the Italian government argued that the duty imposed was contrary to article 30 TFEU and sought to charge it under article 258 TFEU (Leistner, 2014).
In its defense, the Italian government argued that it did not wish to benefit from the money collected from this measure and that it had no intention of raising revenue but was only trying to discourage people from exporting the art pieces. The court ruled that the purpose of imposing such charges were not relevant and that the government was indeed in breach of the article 30 TFEU.
Because of the ease with which the governments to impose charges that were not necessarily custom duties the commission sought to define more clearly article 30. Indeed, if the article had only referred to custom duties, then the member states could have more easily evaded their obligations under the article by instituting charges that were not technically custom duties but had the same effect as custom duties. In order to avoid such incidences, the article also incorporates the charges that have the equivalent effect to customs commonly referred to as CEE's (Manoli, 2013). The Court of Justice in the case of the Commission v Italy defined the CEE. The definition stated that CEE's are any pecuniary charge without regard to how small it is or its designation or mode of institution which is applied unilaterally on the domestic or foreign goods (Baeyens & Goffin, 2011). It further stated that such charges for as long as they cross a frontier, and the charge is not regarded as customs duty in the literal sense will constitute of a charge, which has the same effect as a customs duty, even when it is not intended to benefit the state. It states further that such a charge will be considered as CEE even if it does not discriminate or protect local products and even when the charge imposed on the product is not in competition with domestic products (Baeyens & Goffin, 2011). According to the article 30, any charge that falls within the article will be considered illegal.
Messerlin (2011) observes that several charges may fall outside of the scope of the article 30 TFEU, one of those charges includes charges for the services that confer a certain benefit to those paying. Such an instance is better described by the case of the Commission versus Italy. In the case, the Italian government had applied a charge on products arriving into the country and because of prohibiting the goods from accessing the country; the government was able to acquire statistical data, which was eventually made available to traders (Thygesen, 2013). The Italian government then argued that the charge imposed was considered as payment for the benefit that the traders got in the form of the statistics provided by the government. The court in its submission argued that in order for the argument of the government to carry, there had to be sufficient benefit that would be received by individual traders. The decision arrived at by the court was based upon the fact that the general benefit was provided for general category of traders was insufficient to justify the charge (Leistner, 2014).
The second charge that would potentially fall outside of the scope of the article 30 is on the services required by the EU or services required by international law. Indeed, the law provides that a member state of the EU be entitled to provide a charge for providing services that are required by the EU or international law, but the charge must be in direct proportion to the cost of providing such services (Haukeland, 2012). Such a case is clearly described by the case between the Commission and Germany.
In the case between the Commission and Germany, the government in Germany charged fees for inspecting live animals that were entering its borders as required by Directive 81/389. The Court of Justice ruled that the inspections would not be classified as CEE's if they satisfied a number of conditions. The first condition is if they did not exceed the actual costs of inspection. The second was if the inspections are obligatory and standard on all products concerned across ...