Concept and Legal Foundations of the Free Movement of Goods
Der Free Movement of Goods is a central principle of the European Single Market and guarantees that goods can be traded between the Member States of the European Union (EU) without unjustified restrictions. In the legal context, the concept is particularly enshrined in the Treaties of the European Union and its secondary legislation, but also in international law and in German constitutional and economic law.
Legal Basis and Objectives
European Legal Foundations
The legal foundations of the Free Movement of Goods are primarily found in the Treaty on the Functioning of the European Union (TFEU). In particular, Articles 28 to 37 TFEU contain comprehensive provisions on the movement of goods, with the most important regulations being the following:
- Article 28 TFEU defines the customs union and describes the elimination of customs duties and charges having equivalent effect, as well as the introduction of a common external tariff.
- Article 30 TFEU prohibits customs duties and charges having equivalent effect on trade between the Member States.
- Articles 34 to 36 TFEU regulate the prohibition of quantitative restrictions on imports and exports, as well as all measures having equivalent effect.
The purpose of these provisions is to eliminate barriers to trade in the single market and thereby ensure the free flow of goods.
Definition of Goods under EU Law
In a legal sense, goods are considered to be all tangible objects that have a monetary value and can be the subject of commercial transactions (see ECJ, Case 7/68, Commission/Italy, [Artworks Judgment]). Intangible goods and services are excluded from the law on the movement of goods and are governed by separate areas of EU law.
The Fundamental Freedoms and the Single Market
Principles of the Fundamental Freedoms
The Free Movement of Goods is part of the so-called fundamental freedoms of the single market, which also include the free movement of workers, the freedom to provide services, and the free movement of capital. These fundamental freedoms are all aimed at creating a unified economic area in which discrimination and restrictions based on nationality or the Member State of origin are abolished.
Significance for the Single Market
The Free Movement of Goods is an essential element for the functioning of the single market. In addition to economic integration, it is intended to promote growth, competitiveness, and social and environmental standards in Europe.
Restrictions and Exceptions
Permissible Restrictions
Although the Free Movement of Goods enjoys extensive protection, European Union law recognizes certain exceptions. Article 36 TFEU allows specific restrictions on grounds of public morality, public order or security, the protection of health and life of humans, animals or plants, the protection of national treasures possessing artistic, historic or archaeological value, as well as the protection of industrial and commercial property.
Necessity and Proportionality
Such exceptions are subject to the principle of proportionality and may not constitute means of arbitrary discrimination or disguised restriction on trade between Member States. The European Court of Justice (ECJ) regularly examines in disputes whether national measures are actually necessary and appropriate.
Example: Judicial Review
National measures that are justified, for example, on grounds of health protection, must actually be suitable to achieve the intended objective and may not go beyond what is necessary for this purpose (ECJ, Case 120/78, Cassis de Dijon).
Non-tariff Trade Barriers
In addition to traditional customs duties, there are numerous non-tariff trade barriers such as technical regulations, product standards or official approval requirements which may impair the movement of goods. Under Article 34 TFEU, such measures are in principle prohibited unless they are exceptionally justified by overriding requirements of the public interest.
Harmonization and Mutual Recognition
Harmonized and Non-harmonized Areas
The EU legislator has harmonized product-specific requirements in numerous areas through directives and regulations. In harmonized areas, the principle of legal approximation applies, so that products that comply with uniform EU standards can circulate freely in the single market.
Principle of Mutual Recognition
In non-harmonized areas, the principle of mutual recognition applies. A product that has been lawfully produced and placed on the market in one Member State may, in principle, also be sold in other Member States.
Law Enforcement and Legal Protection
Powers of the Institutions
The monitoring of compliance with the principle of the Free Movement of Goods is primarily the responsibility of the European Commission, which can initiate infringement proceedings against Member States. Likewise, affected companies and individuals can defend themselves against restrictions before national courts and the European Court of Justice by way of individual legal protection.
Significance of the Cassis de Dijon Ruling
The so-called Cassis de Dijon decision by the ECJ is of particular significance for the enforcement of the Free Movement of Goods. It established the principle that—subject to overriding requirements of the public interest—no further requirements may be imposed on goods from other Member States, provided that these meet the protection standards of the export state.
Free Movement of Goods under German Law
Integration into the Basic Law
The Basic Law does not contain an independent principle of the Free Movement of Goods, but refers in Article 23 GG to Germany’s participation in the development of the European Union. National regulations must therefore not contradict the requirements of EU law. In German economic law, the principle is supplemented by competition law provisions and the prohibition of discriminatory differential treatment of domestic goods.
Practical Relevance
In everyday life, the Free Movement of Goods means that companies and consumers can import, export and distribute products from throughout the EU without unjustified obstacles. This is particularly relevant for online trade and traditional imports by domestic traders.
International Dimension
Free Trade Agreements and WTO
The principle of the Free Movement of Goods is also reflected in international agreements such as the GATT/WTO agreement or in free trade zones, for example, the European Free Trade Association (EFTA). Here too, customs duties and other trade barriers have largely been abolished, although not to the same extent of mutual recognition as in the EU single market.
Legal Developments and Current Challenges
Digitalization and New Forms of Trade
With ongoing digitalization, new challenges are arising for the Free Movement of Goods. For instance, digital goods and online platforms give rise to questions about the distinction between goods and services, as well as the control of imports and exports.
Sustainability and Consumer Protection
Environmental and consumer protection requirements mean that rules governing the movement of goods must be regularly adapted, for example regarding the authorization of certain hazardous substances or food labeling obligations.
Conclusion
The Free Movement of Goods is a fundamental pillar of the European Single Market and is a complex, dynamic field of law at European, national, and international level. Its core objective is the elimination of trade barriers and the promotion of an open, competitive market while safeguarding legitimate public interests. The ongoing development of the legal framework remains a continuous task in light of new technologies and political challenges.
Frequently Asked Questions
What exceptions to the principle of the free movement of goods does European Union law provide for?
The principle of the free movement of goods under Articles 28 et seq. TFEU (Treaty on the Functioning of the European Union) is fundamental to the single market but not absolute. According to Article 36 TFEU, specific exceptions are permissible. These include, for example, prohibitions or restrictions on the import, export or transit of goods justified on grounds of public morality, public order and security, the protection of the life and health of humans, animals or plants, the protection of national treasures of artistic, historic or archaeological value, or the protection of industrial and commercial property. However, these exceptions must be proportionate and not serve as a means of arbitrary discrimination or disguised restriction of trade. In addition to the explicit exceptions, so-called overriding requirements of the public interest (such as consumer or environmental protection) can also serve as a justification for certain national measures according to ECJ case law.
What is meant by a quantitative restriction and a measure having equivalent effect within the meaning of Article 34 TFEU?
Quantitative restrictions are, legally speaking, any measures that directly limit the quantity of imports or exports of goods, such as import or export quotas. Even more significant are the so-called measures having equivalent effect. These are all state regulations capable of hindering trade between Member States directly, actually, or potentially. The term is interpreted very broadly by the Dassonville formula of the European Court of Justice and also includes technical regulations, approval requirements, or labeling rules insofar as they disadvantage goods from other Member States. However, the so-called Keck case law applies, according to which certain selling arrangements—which apply equally to all economic operators and have the same impact on domestic and foreign goods—are not considered measures having equivalent effect.
To what extent does the “certificate of origin” play a role in the law governing the free movement of goods?
The legal origin of a good is essential for the free movement of goods, as the principle only applies to products which originate in a Member State or are in free circulation there. This also includes third-country goods that have been properly imported into and customs-cleared in an EU state. Disputes often arise regarding the precise determination of origin, for example, if goods from non-EU countries are only temporarily stored, processed, or repackaged. EU origin rules, particularly the Customs Code, provide detailed requirements for determining origin, which may be decisive for possible import bans, tariff concessions, or other measures.
What role do national technical regulations play in the context of the free movement of goods?
National technical regulations, for example concerning packaging, labeling, composition, or product safety, can constitute significant barriers to trade. According to Article 34 TFEU, such regulations may not restrict market access for goods from other Member States, unless they are justified by overriding requirements. Here, the principle of mutual recognition applies: products lawfully manufactured and placed on the market in one Member State may, in principle, also be sold in the other Member States. A national technical regulation may therefore restrict imports only in exceptional cases where overriding requirements such as health or environmental protection exist, and the measure itself must be proportionate.
What powers of control do Member States have when importing goods from other Member States?
In principle, Member States may not carry out systematic controls at internal borders, as such controls would violate the spirit of the single market and the relevant provisions of the TFEU (in particular, Articles 34 and 35 TFEU). However, exceptions exist: random checks for reasons of health protection, public safety or to prevent fraud are exceptionally permitted, provided they are proportionate and do not unreasonably restrict the movement of goods. Such controls must be non-discriminatory and must not place goods from other Member States at a disadvantage compared to domestic products. Here too, a regular balance is struck between the protection interests of the Member State and the aim of unhindered movement of goods.
What is meant by the “mutual recognition” clause regarding the free movement of goods?
The mutual recognition clause, which is the principle of mutual recognition, was developed by the European Court of Justice and is a central element of the free movement of goods. It states that a product which has been lawfully manufactured and/or placed on the market in one Member State may, in principle, be marketed in all other Member States without further national regulations hindering market access. A deviation from this is only permissible if overriding requirements of the public interest—such as consumer protection, environmental protection or health protection—are asserted and national measures are taken which are proportionate.
How do charges having equivalent effect differ from customs duties and other charges in the single market?
According to Article 30 TFEU, customs duties as well as charges having equivalent effect between Member States are prohibited. Charges having equivalent effect are any financial burdens levied in connection with the import or export of goods between Member States that do not have the character of a statutory tax (such as VAT or excise duties). The decisive factor is that the economic effect of such a charge resembles that of a customs duty, impeding or making more expensive trade flows between Member States. This differs from internal taxes, which apply equally to domestic and imported goods. Such internal taxes are permissible so long as they are not discriminatory or protectionist in nature (Article 110 TFEU).
