Chapter 20
PROHIBITION OF QUANTITATIVE RESTRICTIONS (QRs) AND MEASURES HAVING EQUIVALENT EFFECT ON IMPORTS AND EXPORTS (MEQRs) ARTICLES 34 AND 35 TFEU
Question 1
Which of the following measures is in breach of Article 34 TFEU?
a. An advertising campaign promoting German agriculture and the German food industry organized by a private company whose organs were set up in accordance with German private law rules and financed by compulsory contributions paid by undertakings in the German agriculture and food sector.
b. An advertising campaign promoting German agriculture and the German food industry organized by a private company whose organs were set up in accordance with German private law rules and financed by voluntary contributions paid by undertakings in the German agriculture and food sector.
c. An advertising campaign promoting German agriculture and the German food industry organized by German farmers.
a. This is the correct answer. In Case C-325/00 Commission v Germany, the ECJ held that the CMA, a private company which was in charge of administering a fund set up by the German government to promote German agriculture and the German food industry, which was established on the basis of law, bound by its Articles of Association (originally approved by the German public authorities) and financed by compulsory contributions paid by undertakings in the German agriculture and food sector, was a public body. The ECJ held that a distinction must be made between a body set up by producers on a voluntary basis and one set up on an involuntary basis. The latter is considered as a public body because it does not enjoy the same freedom as regards the promotion of national products as would producers or their associations based on voluntary membership.
b. This is an incorrect answer. Article 34 TFEU is addressed to the Member States and concerns measures taken by them. On the authority of Case C-325/00 Commission v Germany, measures taken by a private company financed by voluntary contributions of its members are outside the scope of Article 34 TFEU.
c. This is an incorrect answer. Private individuals cannot be addressees of Article 34 TFEU and consequently cannot breach that Article. However, in Case C-265/95 Commission v France, the ECJ held that failure of a Member State to take measures, when necessary, makes that State responsible for the conduct of individuals which breaches Article 34 TFEU in conjunction with Article 4(3) TFEU if that State is in a position to prevent, or terminate such conduct.
Question 2
Which of the following measures can be regarded as a measure having equivalent effect to a quantitative restriction (MEQR) and thus prohibited under Article 34 TFEU?
a. A ban imposed by the French government on all dairy products coming from Germany and the UK.
b. A ban imposed by the French government on advertising on television of dairy products.
c. A ban imposed by the French government on advertising on television of dairy products coming from other Member States.
a. This is an incorrect answer. A ban is a quantitative restriction (QR), not a MEQR. In Case 2/73 Risetia Luigi Geddo v Ente Nazionale Risi, the ECJ defined QRs as any measures which amount to a total or partial restraint on imports, exports or goods in transit. A total restraint refers to a ban.
b. This is an incorrect answer. A ban on advertising on television of dairy products will be regarded as a selling arrangement. In Joined Cases C-267 and 268/91 Criminal Proceedings against Keck and Mithouard, the ECJ held that indistinctly applicable measures will be outside the scope of Article 34 TFEU if they satisfy two conditions: they apply indistinctly to all traders operating within the territory of a Member State and they affect in the same manner, in law and in fact, the marketing of both domestic and imported products even though they may have some impact on the overall volume of sales. The ban on advertising fulfils the first condition. In order to decide whether the second condition is satisfied, i.e. whether there is a factual discrimination, a decisive criterion is whether other forms of marketing/advertising of the imported products are available to importers, and if so, to what extent these alternatives will make the marketing/advertisement of the product more onerous and more expensive for importers than if a restriction had not been imposed. Bearing in mind that alternative means of advertising are available to importers, e.g. on the radio, in newspapers, by distributing leaflets, advertisement of the imported dairy product would not seem to be more onerous and more expensive for importers than for domestic producers. Accordingly, the ban will be a selling arrangement and thus outside the scope of Article 34 TFEU.
c. This is the correct answer. The ban on advertising is a distinctly applicable measure as it is imposed only on imported products and thus constitutes a MEQR. The ECJ provided a definition of MEQRs in Case 8/74 Procureur Du Roi v Dassonville according to which all trading rules enacted by Member States which are capable of hindering directly or indirectly, actually or potentially, intra-EU trade are to be regarded as MEQRs.
Question 3
Which of the following measures can be regarded as an indistinctly applicable
measure prohibited under Article 34 TFEU?
a. Italian law which requires that vermouth marketed in Italy must have at least 16 percent of alcohol by volume. However, in other Member States there is no minimum alcohol requirement for vermouth.
b. German law which does not impose a minimum alcohol requirement for vermouth but provides that foreign vermouth can be marketed in Germany if it can lawfully be sold in the MemberState of manufacture.
c. German law which requires that all vermouth made in Germany for sale in Germany must have at least 16 percent of alcohol by volume. However, weaker vermouth can be made for export only.
a. This is the correct answer. In a situation where vermouth produced in other Member States contains less than 16 percent of alcohol by volume the Italian law will constitute a hindrance to intra-EU trade, will be in breach of the principle of mutual recognition established in the Cassis de Dijon Case and will be unlikely to be justified under mandatory requirements.
b. This is an incorrect answer. In Case 59/82 Schutzverband Gegen Unwesen in der Wirtschaft v Weinvertriebs-GmbH, the ECJ held that the requirement that foreign vermouth could be marketed in Germany if it could lawfully be sold in the state of manufacture constituted a distinctly applicable measure as it applied only to imported products. The rules of the Member State of exportation are irrelevant (in Schutzverband, the law of the Member State of manufacture, the Italian law, required vermouth made in Italy to have at least 16 percent of alcohol by volume) as the discriminatory effect should be assessed in the light of the legislation of the Member State of marketing alone.
c. This is an incorrect answer. A Member State is allowed to enact legislation similar to that mentioned in c) above provided that, first, it applies indistinctly to all domestic products whether intended for the domestic trade or for export and, second, it does not discriminate against imported products or hinder the importation of products from other Member States.