Interpretation Of EU Law: Fictitious Essay 14/2021 The Real Oil Co. Vs France And Germany [2021].

Concept of Quantitative Restrictions and Measures Having Equivalent Effect

To: The Court of Justice of the European Union

Date: xx-xx-2021

Re: Fictitious Case 14/2021 The Real Oil Company vs France [2021]

I would like to render my legal opinion on the case as requested by the French Court.

 The relevant facts of the case were that the Real Oil Company, which was established in Spain, was transporting its ‘Real Olive Oil’ from Spain to Belgium via the route of Normandy in France. Real Olive Oil is sold in all other member states of the European Union, and this would have been an opportunity for it to enter the Belgian market. However, due to a protest in Normandy, which was permitted by the French authorities, the A-36 motorway toll point was blocked by the protestors. For the safety of the protestors, the French authorities closed the A-36 motorway for a period of five hours, and this resulted in the Real Oil Company being unable to reach its destined location in Belgium at the scheduled time.

• Whether the rights of Real Oil Company under article 34 of TFEU were violated?
• Whether the French Government rightfully restricted article 34 of TFEU?

• Treaty on the Functioning of the European Union 1958, art. 34
• TFEU 1958, 35
• TFEU 1958, art. 36

In my opinion, the following would be the interpretation of EU law in relation to the issues of the case and to answer the questions referred by the French Court-

1. The primary objective of articles 34-36 of TFEU is to make sure the free movement of goods amongst the member states of EU is possible, with a few exceptions listed in article 36. The articles provide for prohibitions on quantitative restrictions, in terms of imports and exports within the member states.Article 36 provides for grounds that allow the member states to impose such restrictions in certain cases concerning public policy, public morality, protection of health and life of humans and animals, protection of commercial property, etc.

The concept of quantitative restrictions would refer to those forms of restrictions imposed by the member states which either cause a partial or complete restriction on the transit of goods between the member states. In addition, the concept of ‘measures having equivalent effect’ as provided for under articles 34 and 35 of TFEU give a broader scope to the meaning of quantitative restrictions. These refer to those rules which may directly or indirectly impose barriers on intra-community trade between the member states.These restrictions are not simply limited to the concept of trading related regulations but also refer to non-binding regulations and technical regulations of the member states.

Treaty derogations are those provisions that allow for the suppression of laws under the treaty in certain circumstances. This implies the restriction to impose the provisions of the treaty. The exceptions provided under article 36 of TFEU serve as derogations from the principles of free movement of goods granted under TFEU.

The concept of ‘mandatory requirements’, as established under the Cassis de Dijon case, creates necessities for member states that their commercial products must fulfil in order to be eligible for trade within the member state. An example of this is the need to meet health and safety standards set within the concerned member state.

2. The closure of A-36 motorway by the French authorities cannot be considered to be a measure that acted as a quantitative restriction or one that had an equal impact as a quantitative restriction as provided for under article 34 of TFEU. This is so because the imposition of the measure was justified under the provisions of article 36 of TFEU. The French authorities undertook the measure for the purpose of public safety and for the sake of protecting human life. This makes the closure of A-36 motorway justifiable under TFEU.Also, the closure was non-discriminatory in nature as it would have equally prohibited the movement of domestic traders intending to move through the motorway as it restricted the movement of traders from other member states. It equally applied to all types of traders and individuals, making it an ‘indistinctly applicable’ measure. This makes the restriction justifiable under article 36 and is important in the justification of the restriction as article 36 does not allow for those restrictions that are means for creating ‘arbitrary discrimination’. Had the restriction been discriminatory in nature, it would not be justifiable under the provision of Article 36 and would be considered to be a violation of the principle of free movement of goods as provided for under
3. A member state would be in breach of article 34 if they impose quantitative restrictions on the free movement of goods between the member states and would also be in breach of the article if they fail to take progressive actions for ensuring  the free movement of goods is not hindered under their geopolitical territory. This was established in the case ofCommission v France; wherein, the French authorities did not undertake any measures against the sabotaging behavior of French farmers that led to the destruction of agricultural produce from the other member states. The failure to take preventive measures was also considered to be a contravention of article 34. However, in the case of Schmidberger v Austria, the courts also noted that in cases concerning fundamental rights of citizens, preventive measures cannot be taken for the purposes of article 34 as the freedom of expression and assembly are integral parts of the national laws of member states and that of European Union law.  Therefore, a failure to take positive steps and measures for the purpose of ensuring free movement of goods would not be considered a breach of article 34, if it was for the purpose of allowing the citizens to exercise their fundamental rights.
4. The European Court of Justice has held in multiple cases the importance of respecting the fundamental rights of citizens and has thus considered the rights to be a crucial aspect of the general principles of law as protected by the Court.Furthermore, these are also protected under the Charter of Fundamental Rights, and the rights listed under the Charter are granted to all the citizens of EU whilst being legally binding on the member states of EU. The primary sources of inspiration for the codification of these rights were from the constitutional traditions of the member states of the EU, the European Social Charter, ECHR, and the general principles followed by the member states of Europe. The field of application of the rights is limited within the powers of the Union to the member states and to other bodies of the European Union.
5. In the present case of the Real Oil Company, the actions taken by the French authorities can be justified as they were taken with the aim of protecting the fundamental rights of the citizens. The French citizens were protesting and restricting these protests would be a violation of their fundamental rights as decided in a similar case of Schmidberger v Austria.Furthermore, the member states can take restrictive measures against commercial organizations if the activities of the commercial organization are violative of the fundamental rights granted under the constitution of the member state, and there is no scope of taking any less restrictive measure for protecting such freedoms.

Therefore, in my opinion, the actions taken by the French authorities were justified and in adherence with EU law.

Issues –

• Whether the German legislation is contrary to the application of Article 34?
• Whether Germany can justify their imposition of minimum olive oil content?
• Whether German legislations have precedence over EU provisions?

Rules –

• TFEU, art. 34
• TFEU, art. 36

Application –

The relevant facts of the case are that the Spanish based company, The Real Oil Company, tries to sell its best selling olive oil products in Germany but was prohibited from doing so under the provisions of a German regulation that restricts the sale of oil that has an olive oil content below the mark of 90 per cent.

The Real Olive Oil company can argue that the regulation is violative of article 34 of TFEU as the regulation creates restrictions on the free movement of goods. The regulation is an indirect restriction on the free movement of goods and would be considered to be a measure having an equivalent effect to quantitative restrictions. Any national measures that hamper intra community trade between the member states is not permissible under the provisions of article 34 of TFEU. Thus, the Real Olive Oil Company can take a stand against the German legislation on these grounds.

The German authorities can justify their position under article 36 of TFEU. The article allows for the imposition of restrictions if they can be justified on certain grounds. These grounds include measures taken for protecting public security, public morality, protection of human health and life, protection of national treasures, and protection of commercial property. Since, the German authorities had created the legislation for the purpose of protecting public health, so that they would consume pure olive oil with an olive oil content of at least 90%, the measure could be justified under article 36. The legislation also did not create any arbitrary discrimination against companies from other member states and was uniformly applicable on companies. Therefore, it was not discriminatory in nature and was neither a disguised restriction on trade. The German authorities could rely on the principle of ‘mandatory requirements’ that aid in the protection of health and safety of the public, and must be fulfilled by all commercial organizations selling olive oil within Germany. The Court of Justice had recognized the principle of mandatory requirements in the Cassis de Dijon judgment and had permitted this to be an exception to the prohibition of restrictive measures under Article 34. Thus, Germany can accordingly justify their enforcement of the legislative requirement related to the olive oil content.

With regards to whether German legislation would take precedence over EU law, this would not be allowed as European Union law is considered to take primacy over the laws of the member states of the Union. The Court of Justice had established that EU law has priority over any national laws of the member states that contravene it in several cases, beginning with the landmark judgment of the  Costa v. ENEL case. Therefore, the German legislation would not take precedence over EU law.

Conclusion –

The German legislation is contrary to the application of Article 34 of TFEU. However, it can be justified in case it meets the grounds of public health and safety. The technicalities of its necessity for meeting the health and safety criteria would depend upon the ruling of the Court of Justice. 

Primary Sources

Treaties

EU Charter of Fundamental Rights 2000

Treaty on the Functioning of the European Union 1958

Cases

Commission v France (C-265/95)

Eugen Schmidberger, Internationale Transporte und Planzüge v Austria (2003) C-112/00

Flaminio Costa v ENEL (1964) Case 6/64

International Handelsgesellschaft v Einfuhr- und Vorratsstelle Getreide [1970] ECR 1125 Case 11/70

Omega Spielhallen und Automatenaufstellungs-GmbH v Oberbürgermeisterin der Bundesstadt Bonn C-36/02

Procureur du Roi v Benoît and Gustave Dassonville (1974) Case 8/74

Rewe-Zentral v Bundesmonopolverwaltung für Branntwein (1979) Case C-120/78

Secondary Sources

Reports

European Commission, ‘Guide on Articles 34-36 of the Treaty on the Functioning of the European Union (TFEU)’ (2021) Office Journal of the European Union < https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52021XC0323(03)&from=EN>

European Parliament, ‘The Charter of Fundamental Rights’ (2017) European Union < https://www.europarl.europa.eu/RegData/etudes/fiches_techniques/2013/010106/04A_FT(2013)010106_EN.pdf>

Webpages

ICRC, ‘Derogations’ (ICRC Law, 2022) < https://casebook.icrc.org/glossary/derogations>