The subject of commercial transactions.”[2] There are several

The three issues to be discussed pertain to the
free movement of goods, free movement of people and EU citizenship, and the
direct effect of directives.

 

Where Cindy is concerned, it must primarily be
established that “fruit cordials” constitute as goods under Art 30 TFEU1,
as they are “products which can be valued in money and which are capable, as
such of forming the subject of commercial transactions.”2
There are several issues pertaining to expanding into the EU market. Principally,
to facilitate trade between members, Art 3 EC3
eliminates customs duties and quantitative restrictions. The primary question is
whether the prohibition of express food advertising and the limitation on the
shape of the cordials by national law complies with EU law considering they are
Measures Equivalent to Quantitative Restrictions? 4
MEQRs are in breach of art 34 if they fall under the Dassonville formula, which
broadly defines MEQRs as “all trading rules enacted by Member States which
are capable of hindering directly or indirectly, actually or potentially,
intra-Community trade”5.

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Directive 70/506
divides MEQRS into distinctly and indistinctly applicable MEQRs. Those placed
on the fruit cordials are indistinctly applicable as they apply to both
domestic and imported products7.

Due to the nature of their application, the courts have adopted a less strict
approach towards MEQRs as they are often national differences between EU Member
States rather than protectionist measures aiming to discriminate against
imports.  Cassis established two rules to
allow indistinctly applicable MEQRS to stand and fall outside of art 34: the
rule of mutual recognition and the rule reason. Under the rule of mutual
recognition, “there is no valid
reason why, provided that they have been lawfully produced and marketed in one
of the Member States, the products should not be
introduced into any other Member State.”8 Thus,
if the fruit cordials meet the standards of country X, then they should, by
virtue of mutual recognition, meet the standards of country Y.

 

As for the rule of reason, indistinctly
applicable MEQRS will fall outside of art 34 if they satisfy certain mandatory
requirements. The list is non-exhaustive, however what pertains to the ban on
advertising and the shape of the bottles would be “the fairness of commercial
transactions and the defence of the consumer” and public health.  The general rule is that if a measure is
necessary then it will be allowed under the rule of reason. However, it must be
proportionate.9

 

There is a distinction between product
requirements, which relate to the goods themselves (e.g form, size, weight,
labelling, packaging, etc.) and  selling
arrangements, which relate to extrinsic qualities like advertising and rules
regarding when and by whom goods may be sold.10
Keck established that where a measure is indistinctly applicable, if
that measure constituted a ‘selling arrangement’, it would not breach Article
34, but subject to two requirements: if provisions apply to all effected
traders operating within the national territory and they affect in the same
manner, in law and fact, the marketing of domestic and imported products.

 

Applying these to the two issues, the rule that
fruit cordials must be sold in “tall, thin bottles” as to prevent confusion is
a product requirement. Whereas the prohibition on the express advertising of
foodstuffs in magazines is a selling arrangement. Regarding the shape and size
of the bottle, it is unlikely that this product requirement will fall outside
of article 34 due to primarily the mutual recognition rule. However, article 34
captures dual burden cases as such. For instance, Belgian law that restricted
margarine to cube-shaped tubs was prohibited because margarine was lawfully
sold in other types of packaging elsewhere in the EU11.

If the rule of reason is incorporated, such a requirement would be
disproportionate where labelling would suffice, and would impose a dual burden
on the importer. However, labelling as to the country of origin is far more
proportional and can extend protection towards consumers just as effectively as
this would ‘hinder the free movement of goods less.’12
Although, Lasa argues that labelling does not provide adequate protection for consumers
and may mislead them.13
It may also be the case that a strict application of the Court’s case law will
result in a ‘labelling jungle’.14

 

As for the prohibition on advertising, the line
between product requirement and selling arrangement is uncertain15.

It is unlikely however that it would be a product requirement, although an
advert may constitute as a product requirement.16
A general prohibition on advertising beverages with an alcoholic strength above
23 degrees in the media, streets, highways, cinemas and public transport
amounted to an MEQR although it was non-discriminatory.17
Where proceedings were brought against a French firm for distributing
catalogues and brochures infringing German law which prohibits eye-catching
price comparisons, the law was held by the court to be an MEQR.18
 This decision was reached via mutual
recognition. However, where an advertising restriction affected the marketing
of products of other Member States in the same way as domestic ones, it was not
considered an MEQR.19
This perhaps is relevant to Cindy’s situation in that the law applies to
domestic and EU producers alike.

 

However, AG Jacobs believes that generally a
restriction on advertising will have a definitive impact on EU producers
wishing to expand into a different market than on already established domestic
producers. He argues that advertising is fundamental, as it allows producers
“to persuade consumers that their goods or services are worth buying”20.

Also, it is fundamental in terms of launching new products and accessing new
markets, as “without advertising it would be much easier for established
manufacturers to retain their existing market share, because prospective market
entrants would find it difficult to gain foothold.”21
This, in some markets will create monopolies and inhibit competition, perhaps
failing then to protect consumers from extortionate pricing. Therefore, he
suggests a market access test as an alternative to Keck. If the proposed test
is applied to Leclerc-Siplec22,
a partial ban on advertisement will not amount to substantial restriction on
market access. On the other hand, if the test is applied to Alpine
Investments, it would. Weatherill and Beaumont note that
there is a risk ‘that the Court has introduced a legal test that tends to tip the
balance away from legitimate social protection towards a deregulated (perhaps
unregulated) free market economy in which standards of, inter alia, consumer
protection will be depressed’23.

Establishing directives to harmonize the law in this area will post probably
entail vague clauses, which would pose a risk for producers, as they would not
be certain as to what constitutes lawful commercial behaviour. Hence, it may
deter commerce and harm the single market.24
Given these cases, if Cindy can prove that this ban on advertising impedes
market access, then she will be able to proceed with her advertising campaign.

 

Moving then to Ken who is unemployed, not a
jobseeker, student or a taxpayer; he will not be able to enjoy rights under Art
45 TFEU. Since Ken is an EU
citizen and by virtue of the direct application of Art 20(1) TFEU he has
the right to enjoy the
right of residence in country Z25. This right however is
not absolute and is subject to limitations. Where EU citizens were unemployed,
showed no signs of being employed, and were claiming income support from the UK
government, they were required to leave the UK.26 An EU citizen has the
right to reside in another EU Member State for up to three months without
conditions or formalities. If they want to stay for a period longer than three
months, they must either be workers, have sufficient resources and
comprehensive sickness insurance, be enrolled at a private or public
establishment, or be family members accompanying a resident. While an
EU citizen has the right to enjoy social advantages on equal terms with
nationals27,
‘it is for each Member State, having due regard to union law, to lay down the
conditions for the acquisition and loss of nationality’28

 

Ken was able to reside in country Z for a year
on the basis of having ‘sufficient resources’, when Cindy was financing his
stay. He was also entitled to social assistance at that time. However, now that
she has decided to refrain from sending him money, he no longer fulfils any of
the four conditions. Therefore, he will no longer be entitled to social
assistance.

Anyone not classed as a worker must ‘not become
a burden on the social assistance system of the host Member State during their
period of residence.’29
A Member State must
therefore have the possibility, pursuant to Article 7 of Directive
2004/38, of refusing to grant social benefits to economically inactive Union
citizens who exercise their right to freedom of movement solely in order to
obtain another Member State’s social assistance although they do not have
sufficient resources to claim a right of residence.

 

 However,
it must be noted that economically inactive EU citizens cannot be assumed to be
a burden on the social assistance system. Each case must be judged
individually. However, Article 7(1)(b) is now construed as “seeking to
prevent economically inactive Union citizens from using the host Member State’s
welfare system”.30
It should be noted that although one person cannot be described as an
‘unreasonable burden’ for a Member State, it is however the accumulation of all
individual claims creates that burden.31
This has perhaps opens the doors for ‘benefit tourism’. However, should also be
noted the Brey case concerned non-contributory benefits, and thus can be
distinguished from Ken’s case. Therefore, Member States are entitled to
distribute social security benefits depending on residence, and this does not
constitute ‘systematic verification’ contrary to Article 14(2) of the Directive,32
as reiterated in R(Gureckis)
v SSHD33.

However, R(Gureckis) quashed the policy of removing EEA national rough sleepers
for reasons including the application of ‘systematic verification’ and
discrimination, thus it is likely that Ken would not get deported, but this
does not mean that he will be entitled to housing benefits.

 

It is recommended that
Ken registers as a job-seeker with the relevant employment office, as when he
does so, he retains the status of worker for six months, retaining his right to
reside in country Z, and consequently may be able to rely on the principle of
equal treatment in Article 24(1). 34

 

With regards to Barbie’s situation, it is
established law that the Commission can act against Member States that breach
EU law35,
in recognition of the ‘new legal order’ emphasizing that EU law is supreme to
national law36,
and as such should be integrated into the Member States’ legal systems.37
Where a national judge is faced with a conflict between national and EU law, he
has to ‘dis-apply’ or set aside the national law but not invalidate it.38

 

Regarding the EU directive in Barbie’s
situation provides that where unpaid internships for persons aged under 25
years old exceeds two weeks in duration, any time after the two weeks duration
should be paid at the minimum hourly rate applicable for equivalent workers in
that country. This conflicts with the Act of Parliament in force in country X,
which provides for a minimum hourly pay for those over 18 who must be employees
not interns.

 

Art. 288(3) TFEU provides that ‘a Directive
shall be binding as to the result to be achieved, upon each Member state to
which it is addressed, but leave to the national authorities the choice of form
& methods.’ Directives can have a direct effect if it appears that they are
capable of having it, and can be given effect through the estoppel argument.39
For that to happen, the transposition period must have expired, which has in
Barbie’s situation.40
The Directive must also give clearly identifiable rights to individuals, which
it also does,41
therefore the following will apply.

 

Directives
only have a vertical direct effect, meaning that a claim can be brought against
the state or an emanation of the state42
and not an individual. Thus, Barbie cannot bring a claim against her employer,
but she can bring a claim against Middling Water if it is considered an
emanation of the state. An emanation of a state must be subject to state
authority, control or have special powers43.

It must also provide a public service.44
Farrell45
affirmed that Foster is not a cumulative test, and that for an entity to be an
emanation of state, it must satisfy one of the two elements in Foster. Middling
water appears to be an emanation of the State thus direct effect of the
directive would apply to them. Craig argues that a Foster line of case law
embodies an “inverse principle of state or
vicarious responsibility, whereby a body that might be in some way connected
with the state is held responsible for the failing of the State itself,
even though it had no control over the relevant event.”46

 

One must note
that through indirect effect, a directive is capable of being applied
horizontally. As noted before, the interpretation of ‘state’ is wide, and thus
national courts are part of the State, hence their obligation to interpret
national law in line with EU law (harmonious interpretation).47

 

With regards to state liability for
non-implementation, Barbie may gain remedy via suing the State for its failure
to implement legislation when it was obliged to do so. This is contingent upon
three conditions: if the Directive gave rights to individuals, identifiable within
the working of the direction, and there was a causal link between the State’s
breach and the damage suffered by the individual.48
The breach of EU law must also be ‘sufficiently serious’.49
However, it has been argued that “acceptance of state liability for judicial
acts” would undermine the independence of the judiciary.50

 

A claim could also be made on the grounds of
the non-discrimination principle. In Mangold51,
where although the transpiration had not expired, the ECJ ruled that the
applicant could rely on the EU general principle of non-discrimination against
age to challenge fixed-terms of a contract. Even in cases involving private
parties, Directive 2000/78 can be invoked to set aside conflicting provisions.52
It seems as though this is an attempt “to give greater effect to
unimplemented directives that comes at the expense of legal certainty”. It is
argued that Mangold parallels with the decision in Portgás in the
sense that the aim to ensure the implementation of directives by any means
regardless of how this is procuring a “new type of direct effect
geometry.”53

1 Consolidated version of the Treaty on the Functioning of the
European Union 2012 OJ C 326/01.

2 Case 7/68 Commission v Italy Italian Art Case 1968 ECR
423.

3 Consolidated version of the Treaty Establishing the
European Community 2002 OJ C
325.

4 ibid Art 34-36 TFEU.

5 Case 8/74 Procureur du Roi v Dassonville 1974 ECR 837; Directive 70/50 (1969).

6 Commission Directive 70/50/EEC 
on the abolition of measures which have an effect equivalent to quantitative
restrictions on imports and are not covered by other provisions adopted in
pursuance of the EEC Treaty 1969  OJ L 13.

7 Case 120/78 Rewe- Zentral AG v Bundesmonopolverwaltung fur
Branntwein (De Cassis) 1979 ECR 649.

8 Ibid.

9 Cassis n(5).

10 Cases 267 and 268/91 Criminal Proceedings against Keck v
Mithourad 1993 ECR I-6097.

11 Case 261/81 Walter Rau Lebensmittelwerke v De
Smedt PVBA 1982 ECR 396.

12 Ibid.

13 H.C. Von Heydebrand u.d. Lasa, ‘Free movement of foodstuffs, consumer protection and food standards in the European Community: has the Court of Justice got it wrong?’ 1991 16 European Law Review 391, 411.

14 Paul Craig
and Grainne de Burca: EU Law (1st end, OUP 2015)

15 Stephen
Weatherill, ‘After Keck: Some Thoughts On How To Clarify The Clarification’ 1996 33(5) Common
Market Law Review 887–908.

16 C-470/93 Verein gegen Unwesen in Handel
und Gewerbe Köln e.V. v Mars 1995
ECR I-1923.

17 Cases C-1/90
and C-176/90 Aragonesa de Publicidad Exterior SA and Publivía SAE v
Departamento de Sanidad y Seguridad Social de la Generalitat de Cataluña 1991
ECR I-4151.

18 Case C-126/91
Schutzverband gegen Unwesen
in der Wirtschaft e.V. v Yves Rocher GmbH 1993 ECR
I-2361.

19 Case C-292/92 Ruth Hünermund and others v
Landesapothekerkammer Baden-Württemberg 1993 ECR I-6787.

20 Case C-412/93 Société d’Importation
Edouard Leclerc-Siplec v TF1 Publicité SA and M6 Publicité SA1995 ECR
I-00179, Opinion of AG Jacobs.

21 Ibid n(20).

22 Case C-412/93 Société d’Importation Edouard Leclerc-Siplec v
TF1 Publicité SA and M6 Publicité SA1995 ECR I-00179.

23 S Weatherill and P Beaumont, EU Law(3rd
edn, Penguin 1999) 608.

24 Hugh Collins, ‘Harmonisation by example: European laws
against unfair commercial practices’ 2010 Modern Law Review 73(1) 89-118.

25 Case C-200/02 Kunqian Catherine Zhu and Man Lavette
Chen v Secretary of State for the Home Department 2004 ECR I-09925.

26 R v Secretary of State for the Home Department, ex
Parte Vitale and Do Amaral 1996 2 CMLR 587.

27 Art.18 TFEU, (n 1) OJ C 326/01.

28 Case
C-192/99, The Queen v Secretary of State for the Home Department, ex parte:
Manjit Kaur 2001 I-01237.

29 Article 7(1)(b) Directive 2004/38/EC on the right
of citizens of the Union and their family members to move and reside freely
within the territory of the Member States 2004 OJ 2 158/77.

30 Case C-333/13, Elisabeta Dano and Florin Dano v
Jobcenter Leipzig 2014 ECR 2358.

31 Case C?299/14,
Vestische Arbeit Jobcenter Kreis Recklinghausen v Jovanna García-Nieto and
Others 2016 ECR 114.

32 Case C-308/14, European Commission v United Kingdom
of Great Britain and Northern Ireland 2016.

33 R (on the application of Gureckis) v Secretary of
State for the Home Department; R (on the application of Cielecki) v Secretary
of State for the Home Department; R (on the application of Perlinski) v
Secretary of State for the Home Department 2017 EWHC 3298.

34 Directive 2004/38/EC on the right of citizens of
the Union and their family members to move and reside freely within the
territory of the Member States 2004 OJ 2 158/77.

35 Article 258 TFEU (n 1) OJ C 326/01.

36 Case 26/62 NV Algemene Transport- en Expeditie Onderneming
van Gend & Loos v Netherlands Inland Revenue Administration 1963 ECR1.

37 Case 6/64
Flaminio Costa v E.N.E.L. 1964 ECR 585.

38 Case 106/77
Amministrazione delle Finanze dello Stato v Simmenthal SpA 1978 ECR 629.

39 Case 41/74 Van Duyn v Home Office 1974 ECR 1337.

40 Case 148/48 Pubblico Ministero v Tullio Ratti 1979 ECR
1629.

41 Case 43/75 Defrenne v SABENA (No.2) 1979 ECR 1365.

42 Case 152 /84 M.H. Marshall v Southampton and South –West
Hampshire Area 1986 ECR 0723.

43 Case C-188/89 Foster v British Gas plc 1990 ECR
1-3313 para 18.

44 ibid para 20.

45 Case C?413/15 Elaine Farrell v Alan Whitty and Others
2017 ECR 745.

46  Paul Craig,
‘The Legal Effect of Directives: Policy, Rules and Exceptions’ 2009 34 European
Law Review 349, 356.

47 Case
13/83 von Colson v Land Nordhein-Westfalen 1984 ECR 1981, Case C-106/89
Marleasing v La Comercial Internacional de Alimentacion 1990 ECR I-413.

48 Cases
C-6 ;Case
9/90 Francovich and Bonifaci v Italy 1991 ECR I-5357

49 Case 46/93 and 48/93 Bresserie du Pecheur Sa v
Federal Republic of Germany and The Queen v Secretary of State for Transport ex
parte Factortame Ltd and Otheres 1996 ECR I -1029.

50 Case C-224/01, Gerhard
Köbler v Republik Österreich 2003 ECR I-10239

51 Case
C-144/04 Werner Mangold v Rüdiger Helm 2005 ECR
I-09981

52 Case
C-555/07 Seda Kücükdeveci v Swedex GmbH & Co. KG 2010 ECR I-00365; Case
C-441/14 Dansk Industri (DI), acting on behalf of Ajos A/S v Estate
of Karsten Eigil Rasmussen 2016 ECR 278.

53 Albertina Albors-Llorens, ‘The direct effect of EU
Directives: fresh controversy or a storm in a teacup?’ 1991 European Law
Review 39, 850-862