Load Problem Questions: Free Movement of Goods Article 34 And 36
Question 1: Advice Free Pork Ltd If It Has Any Grounds under EU Law for Challenging the Two Spanish Laws
Both articles (Article 34 and 36) prohibit measures, which have particular restrictive effects. In majority of the cases, the term ‘measures’ equates to the laws passed directly by the Member State government. However, the ECJ (European Court of Justice), has stated that a measure can be an item wider and less well described. It is worth noting that the course of Conduct for a State intended to induce discriminatory practice among consumers and private individuals can constitute a measure (regardless it having or lacking a binding influence) and be in violation of the Article 34. The aspect of measures can also include the inaction of a State to stop private individuals’ acts, which prevent the free movement of goods (The College of Law 2012, p200).
The ECJ described the expression of quantitative restriction as measures that amount to partial or total restraint of, based on the circumstances, exports, imports or goods in transit. There are two laws that apply in this category but in this case, the most applicable law is the outright ban enforced by a Member State (Spain) on imports from another Member State (The College of Law 2012, p201). Free Pork Ltd plans to begin selling its products in Spain have been hampered by the law that requires the sale of sausages produced from humanely reared pigs to be checked by Spanish Sausage Checkers (SSC). If the sausages are not checked by SSC, the law prohibits its sales in Spain. However, the process of verifying whether the sausages have those conditions is usually lengthy. Therefore, Free Pork can challenge this Spanish law. There is also a law that requires the name of the company not to use words that imply health or fitness. Free Pork can also challenge this law because it restricts the importation of goods and can affect the brand image of the company.
The SSC is a form of a licencing system, which according to the articles, subjects the import of merchandises to the condition of getting an import licence. Even in situations where the application for an import licence is regarded a mere formality; it is a Quantitative Restriction. This is because is simply a mechanism in which imports can be restricted. In practice, it is very rare for the Member States laws to result to quantitative restrictions. The ban on exports or imports between Member States is found only in unusual circumstances (The College of Law 2012, p201). Therefore, failure by Free Pork Ltd to meet the conditions set by the Spanish laws is an outright ban on exporting sausages to this Member State. As stated earlier, the ban only happens in unusual circumstances, and thus, Free Pork can challenge the law because an unusual circumstance lacks, which prohibits it from exporting the goods to Spain.
The directive was important in developing a brief wording of the Article 34 TFEU (Treaty on the Functioning of the European Union) and it continues to offer guidance on the measures that can constitute a breach of Article 34 TFEU prohibitions. Article 2(1) of the directive describes a class of measures (for instance, national laws) that treat imported goods and domestic goods differently. They are commonly referred to as distinctly applicable measures. Article 3 of the directive describes a class of national laws that apply equally to imported and domestic products. These laws have a restrictive impact and they are commonly referred to as indistinctly applicable (The College of Law 2012, p202).
Therefore, the directive classifies both indistinctly and distinctly applicable measures as measures that have an impact equivalent to restrictions on imports. From the statement, it can be stated that a national law can become MEQR (Measures having Equivalent effect to a Quantitative Restriction) regardless of whether it “discriminates against imported products or appears to treat them in the same way as domestic products but is in practice restrictive in effect” (The College of Law 2012, p202). It is important to note that a Member State is capable of justifying more easily an indistinctly applicable law. Although Free Pork can challenge the law on imports restriction, Spain can justify its law because it is indistinctly applicable.
There are three categories of national laws capable of being MEQRs. The first category is laws aimed at enforcing standards (generally minimum standards) concerning matters like weight, description, labelling, size, content or price of goods. The second category is laws concerning tests designed to make sure that goods conform or obey standards indicated in the first category of laws. The third category is laws able to influence the behaviour of consumers and traders. Therefore, the emphasis is on the rules that are capable of having an impact, rather than on the rules essentially having an impact (The College of Law 2012, p204). The requirement to change the name of the company to a name that does not imply fitness or health can be challenged because that law has satisfied the requirement of being MEQRs. Therefore, Free Pork Ltd can challenge the law by proving that it is MEQRs.
The Cassis de Djion principles are applicable in the case of Free Pork Ltd and the Spanish laws. The first principle of Cassis de Djion states that where a national law is applicable to imported and domestic products alike, and where Community-wide standards concerning the products in question lacks, it may be mandatory to accept obstacles to trade caused by the reality that the national law differs from other Member States laws. However, the obstacles can only be acknowledged if the national law leading to the obstacle is essential to satisfy a mandatory necessity, and the law does not go further than it is necessary to accomplish its aim (The College of Law 2012, p204). Therefore, Free Pork Ltd can challenge the law if it is capable of justifying that the law is indistinctly applicable.
The second principle seems to conflict with the first principle but the two can be reconciled if there is a presumption that the goods lawfully produced in one Member State are marketable in another. However, if there is a law that obstructs this, the Member State can invalidate the presumption through Cassis or through Article 36 TFEU (The College of Law 2012, p207). Therefore, Free Pork Ltd can challenge this law. Based on Article 36, Free Pork Ltd can prove to Spain that the sausages it supplies do not pose health risk to people. The article states that a Member State willing to use this derogation has to prove the existence of an actual health risk (The College of Law 2012, p217). Therefore, under this article, Free Pork can challenges the laws by proving that its products do not pose health risk to the people of Spain.
Question 2. Advise Free Pork Ltd if it has any grounds under EU law for challenging the Spanish advertising requirement.
The Spanish laws regarding the broadcast of adverts targeted at consumers below the age of 12 years adopt a protective approach pushing the timing of the broadcast to not earlier than 9 pm. Under such circumstances, Free Pork’s entry into the Spanish market faces the limitation of adverts set by the Spanish national laws. Two important issues emerge in the deliberations of the legal position in which the Free Pork venture finds itself. On one hand, the right of the Spanish consumer protection policies as well as the right of the company under its commercial rights as discussed below.
In view of the Spanish national agencies position to enforce consumer protection against a backdrop of foreign policies having a negative position on a particular contestable matter, the position of the reprieve is offered to Member States in terms of the protection offered by the European Union. In Konsumentombudsmannen (KO) v De Agostini (Svenska) Förlag AB (C-34/95) and TV-Shop i Sverige AB (C-35/95 and C-36/95), it was held that the right of a Member State to apply advertisement prohibition to a foreign advertiser from a jurisdiction permitting such advertisements should not be contested. The case had particular consumer protection obligations from the Member State and the original intention of the law cannot be overruled.
It therefore implies that the bottom line of the contested interaction between the Free Pork venture into the market through the advertisement is expected to some extent, however debatable it is. However, the application of the law to a foreign market entrant where such a prohibition is not applicable provides a different concept for consideration by Free Pork where the reasons target a particular age group. The Spanish authorities for instance will find it important to invoke the provisions of Article 34 as demonstrated in the Keck formulae adopted in Keck and Mithouard (cases C-267 and C-268/91)  ECR I-6097. Such invocation will involve the enumeration of the specific environment offered to domestic sausage marketers, which would be argued to be fairly reasonable if foreign entrants are subjected to similar treatment.
In Cassis de Dijon, the ECJ made the observation that a Member State has an opportunity to forward conflicting justifications on policies and laws impacting on prohibition of free movement of goods in the EU. According to the deliberations of the court, a nation implementing a trade policy likely to conflict the free movement of goods regime can forward certain arguments to sustain an argument for prohibition of movement of goods (The College of Law 2012, p217). Generally referred to as derogating opportunity from the provisions of the Treaty, it is possible for a Member State to launch a campaign from a legal position of national laws to attempt to control or restrict free movement as negated for all the Member States. As an illustration, it may be expected that the Spanish authorities will invoke the various derogation provisions under Article 36 to deny Free Pork to freely advertise and penetrate the sausage market. Derogation under Article 36 a) cites public interest, which is not clearly outlined and the Spanish authorities may twist the uncertainty to fit into the protection of public interest through barring adverts of sausages to children below 12 years of age.
Derogation c) also sounds like a possible excuse for reliance to invoke prohibitory opportunity for advertising to children below 12 years of age. The complexity of the burden of proof for the protection of health of the Spanish children may however proof to be an opportunity for Free Pork. In Commission v. UK: Re UHT Milk (case 124/81)  ECR 203, it was held that the Member State must avail substantial detail on the nature and magnitude of the risks posed by the said products (The College of Law 2012, p217). By scrutinizing possible discrimination element in the particular Spanish law prohibiting free advertisement, it is possible to compel the authorities to avoid the prohibition. Section 5.2 of Article 36 dispels any arbitrary implementation of discriminatory laws. As observed in Commission v. UK (Re Imports of Poultry Meat) (case 40/82)  ECR 2793, failure to demonstrate the extent to which a law is not restrictive to free movement of goods leads to infringement on EU laws (The College of Law 2012, p218).
In Konsumentombudsmannen (KO) v De Agostini (Svenska) Förlag AB (C-34/95) and TV-Shop i Sverige AB (C-35/95 and C-36/95), it also emerged that the Member State cannot prohibit advertisements from a different Member State on grounds of consumer protection to persons under 12 years of age (The College of Law 2012, p213). On this legal concept adopted by the court in the case, the EU offers relief to Member States to enjoy the regime on free movement of goods and their penetration into the market. It would certainly be restrictive to involved business if consumer protection laws selectively designed to a particular age group closes the channel available to free movement of goods to the ultimate market. The available options to Free Pork must therefore include seeking legal intervention against the restrictive Spanish laws targeting unfair advertisement prohibition on the grounds of protection of persons under the age of 12 years. As noted above, however, the Spanish authorities are expected to offer objection to contesting opinion regarding implemented policies targeted towards consumer protection such as freedoms of advertisement.
The spirit of Article 34 TFEU is particularly to offer definition to various selling arrangements that must prevent hindrances to free movement of goods. Under the finer implementation details, the spirit of the Article captures the need to provide non-discriminatory business regimes free goods movement among Member States. In view of the provisions of the article, it is apparent that the jurisdiction of the EC in determination of the restriction concepts experienced at the hands of national policies of a Member State are reasonable o other Member States. Substantial restrictions experienced by Member States in accessing the channels of distribution and free movement of goods must be countered by the EC framework as enumerated under Article 34 TFEU. The level of intervention by the EC as spelt out in Article 34 TFEU extends to the negative impact experienced by the Member States in the implementation of a regime withholding free movement of goods (The College of Law 2012, p213). The protection of inter-state trade perhaps has a far-reaching impact if implemented without discrimination and the EC demonstrates the importance of such consideration across several rulings through the ECJ. Whereas Member States have the general space of access of inter-state markets within the EU, the existence of principles of subsidiarity in the market and the natural limitations guarded by spirit of international community contradicts the principle of free movement of goods.
The College of Law (2012) Unit 21: Free movement of goods, The College of Law.