Written commercial agreement

Significant imbalance

Sudden termination of established relationships

Competition investigation – French law

Civil competition action

French competition law

Competition investigation – European law

European competition law

Vertical restraints

Distribution law

Liability for defective products

Consumer law

Prohibition of measures having equivalent effect

European business law

Corruption

Compliance

Economic law

Shareholders' agreements

Removal of company directors

Abuse of voting rights

Companies

Action for infringement (counterfeiting)

Rights conferred by the trademark

Patentability

Industrial property

Commercial rent review

Renewal of the commercial lease

Despecialization (change of use)

Commercial leases

Reform of contract law

Reform of the law of special contracts

Preliminary sales agreement

Obligation to deliver goods in conformity

Classification of the contract for services (contrat d'entreprise)

Effects of the agency agreement with respect to third parties

Business contracts

Ongoing contracts

Recovery claims

Court-approved transfer plan

Bankruptcy proceedings

Personal data breaches

White collar crime

Commercial law

500 Questions - Business Law

Any hindrance, even of minor importance, to the free movement of goods is prohibited by Articles 34 and 35 TFEU. Unlike competition law, Article 34 TFEU does not distinguish between measures based on the intensity of their effects on trade within the Union. Thus, a national measure likely to hinder imports must be classified as a measure having an effect equivalent to a quantitative restriction, e …

Are all restrictions, regardless of their severity, prohibited?

The principle of free movement of goods is an essential element of European integration, as its objective, according to Article 3 TEU, is the establishment of an internal market. This involves not only eliminating direct obstacles to trade, such as customs duties, but also preventing States from covertly reinstating tariff or fiscal barriers or quotas. Thus, Articles 34 and 35 TFEU prohibit quantitative restrictions on imports, exports, or transit and all measures having equivalent effect between all Member States.

Any commercial regulation of the Member States likely to hinder, directly or indirectly, currently or potentially, trade between Member States must be considered as a measure having an effect equivalent to quantitative restrictions. The purpose of the measure is irrelevant as long as it presents a risk of hindrance through its effects.

What is the scope of the prohibition?

Article 28 TFEU specifies that the Union is based on a customs union “which shall cover all trade in goods.” The concept of goods is broadly understood by the European authorities. It covers all categories of goods or merchandise imported or exported, as long as they are “products that can be valued in money and are capable, as such, of forming the subject of commercial transactions” . Any object capable of being transported across a border to give rise to commercial transactions is subject to Article 34 TFEU, regardless of the nature of these transactions, except for products whose trade is prohibited, such as narcotics .

The principle of free movement applies not only to products originating from Member States but also to products from third countries that are in free circulation within the Member States.

A good is considered to be originating from a Member State when it has been entirely obtained in that State. Goods in the production of which several countries or territories have been involved are considered to be originating from the one where they underwent their last substantial transformation (Customs Code, Art. 60). When it does not have any of these qualities, the good is referred to as “non-Union.”

To circulate within the Union, a non-European good must be released for free circulation (Art. 201, Customs Code), which requires the completion of the prescribed import formalities and the payment of customs duties and charges having equivalent effect, without any total or partial refund of these duties and charges (Article 29 TFEU, Article 201 Customs Code) . Goods released for free circulation in the Union benefit from the rule of equal treatment, which means they can be treated like products from other Member States. This is particularly important in the case of re-importation into another Member State, regardless of the goods' original origin.

Advice: Do not forget to make a declaration for release for free circulation.

To be admitted for free circulation, the product must have undergone the customs clearance procedure upon its importation into the Union (classification in the tariff nomenclature, identification of its origin, calculation of its customs value, and establishment of the duties owed).

Articles having an artistic, historic, archaeological or ethnographic  value, which can be valued in money and which can form the subject of  commercial transactions, are goods subject to the principle of free  movement.

ECJ, Case 7/68 Commission v Italy Judgment of 10 December 1968, LawLex200900001946JBJ.

Articles 34 and 36 TFEU are applicable to CBD where it is extracted from  the cannabis sativa plant in its entirety since, as it does not contain  a psychoactive ingredient in the current state of scientific knowledge,  it would be contrary to the purpose and general spirit of the Single  Convention to include it under the definition of “drugs” within the  meaning of that convention as a cannabis extract.

CJEU, Case C-663/18 Ministère public and Conseil national de l’ordre des pharmaciens, Judgment of 19 November 2020, LawLex202100004712JBJ.

The mere physical introduction of products into the customs territory of the European Union is not sufficient to characterize a first placing on the market of the Union.

ECJ, C-405/03 Class International BV, Judgment of 18 October 2005, LawLex200900000710JBJ.

What is meant by European goods?

In principle, only state measures are targeted by the prohibition of unilateral measures that are restrictive or have an equivalent effect, excluding acts or behaviors attributable to private individuals or professional groups, unless the professional organization in question has public authority prerogatives.

However, the concept of the State is interpreted broadly as it includes all the authorities of the Member States. A measure originating from a private operator can therefore be attributed to the State . Similarly, the acts of European authorities fall under Articles 34 and 35 TFEU .

Directive No 70/50, now repealed but frequently used by European authorities, specifies that “measures” within the meaning of Article 34 TFEU should be understood as “laws, regulations, administrative provisions, administrative practices,  and all instruments issuing from a public authority, including  recommendations” Whether the measure is binding or not, or whether it is applied or not, is irrelevant.

Advice: an incentive, mere inaction or deficiency, or even an advertising campaign can be classified as restrictive state measures.

A publicity campaign launched by a body functioning in the form of a  company limited by guarantee constitutes a measure for which the State  is liable within the meaning of Article 34 TFEU. 

ECJ, Case 249/81 Commission v Ireland, Judgment of 24 November 1982, LawLex200900001733JBJ.

The implementation of a national provision that establishes a general obligation to identify packaging handled by an undertaking through a marking obligation consisting of affixing the Green Dot logo cannot be classified as a restriction within the meaning of Article 34 TFEU insofar as it was the result of a contract entered into between private operators.

ECJ, Case C-159/00 Sapod Audic, Judgment of 6 June 2002, LawLex200900000626JBJ.

The prohibition of quantitative restrictions as well as measures having equivalent effect applies not only to national measures but also to measures adopted by the EU institutions.

ECJ, Case 15/83 Denkavit Nederland BV, Judgment of 17 May 1984, LawLex200900001566JBJ.

Does the prohibition concern only national rules?

National legislation concerning the free movement of goods within the national territory does not fall under the prohibition of Articles 34 and 35 TFEU as long as it has no connection with the import or export of products and is therefore not likely to hinder intra-Community trade.

Article 34 TFEU cannot, however, be set aside solely on the grounds that all elements are confined within a single Member State. Indeed, the rules relating to the free movement of goods apply as soon as the regulation in question, which indiscriminately targets both domestic and imported products, is likely to constitute a potential obstacle to trade between Member States or there is a connection with the importation of goods into intra-Community trade .

National legislation allowing the “mountain” label to be used only for  products manufactured and marketed in the mountain areas of that State,  may be classified as a measure having an effect equivalent to  quantitative restrictions insofar as it entails a discrimination against  imported products in relation to products of domestic origin.

ECJ, Case C-321/94 Criminal proceedings brought against Pistre, Barthes, Milhau and Oberti, Judgment of 7 May 1997, LawLex200900000298JBJ.

Does the prohibition concern purely internal situations?

Reverse discrimination consists of placing domestic products in a less favorable situation than those coming from other Member States.

It is accepted in the matter of free movement of goods since Article 34 is not intended to ensure that goods of national origin receive the same treatment as imported goods .

National legislation may require the use of a sales designation exclusively for domestic products and not for legally manufactured and marketed imported products under a different designation in another Member State.

ECJ, Case C-14/00 Commission v Italy, Judgment 16 January 2003, LawLex200900000515JBJ.

What is reverse discrimination?

The principle of free movement of goods requires each Member State to accept products that are legally manufactured and/or marketed in other Member States and that are not subject to a European harmonization measure, even if the technical or qualitative requirements differ from those imposed on its own products, as long as an equivalent level of protection of the various legitimate interests involved is ensured .

The principle of mutual recognition stems from the Cassis de Dijon ruling, which was the subject of an interpretative communication by the Commission. According to the Commission, it constitutes “a powerful factor of economic integration that respects subsidiarity,” as it ensures free movement in non-harmonized or partially harmonized sectors, thus avoiding the systematic implementation of detailed regulation at the European level while promoting respect for local, regional, and national traditions and maintaining product diversity. The only exceptions to this principle consist of restrictions justified by the reasons set out in Article 36 TFEU or other overriding reasons of public interest and proportionate to the objective they pursue .

Provided that alcoholic beverages have been lawfully produced and  marketed in one of the Member States, they may be introduced into any  other Member State without the sale of such products being subject to a  legal prohibition on the marketing of beverages with an alcohol content  lower than the limit set by the national rules.

ECJ, Case 120/78 Rewe-Zentral AG, Judgment of 20 February 1979, LawLex200900001513JBJ.

On grounds of the protection of human health, a national regulation may  make the placement on the market of a product having already been  authorized in another Member State subject to prior authorization,  provided that technical or chemical analysis or laboratory tests are not  unnecessarily required when the same analyses and tests have already  been carried out and their results are available to the competent  authorities of the importing Member State

ECJ, Case C-400/96 Criminal proceedings against Harpegnies, Judgment of 17 September 1998, LawLex200900000683JBJ.

Does the principle of mutual recognition require accepting goods manufactured in another Member State in all cases?

Any hindrance, even of minor importance, to the free movement of goods is prohibited by Articles 34 and 35 TFEU. Unlike competition law, Article 34 TFEU does not distinguish between measures based on the intensity of their effects on trade within the Union. Thus, a national measure likely to hinder imports must be classified as a measure having an effect equivalent to a quantitative restriction, even if the hindrance is minor and there are other possibilities for the distribution of imported products.

Quantitative restrictions, prohibited by Article 34 TFEU, are defined as total or partial limitations on import or transit (e.g., quotas, contingents). This definition encompasses any national measure likely to hinder imports, even if it applies indiscriminately to domestic products. It thus partially covers the concept of a measure having equivalent effect.

What is a quantitative restriction?

Directive No 70/50 of 22 December 1969, now repealed, defines measures having equivalent effect as “laws, regulations, administrative provisions, administrative practices,  and all instruments issuing from a public authority, including  recommendations [...] that “either preclude importation or make it more difficult or costly than the disposal of domestic production”, which is the definition essentially adopted by the courts .

Defined very broadly in the Dassonville ruling , the concept of a measures having equivalent effect targets both restrictions and import bans. Two types of measures having equivalent effect can be distinguished: discriminatory measures that specifically affect imported products and are inherently unlawful, and measures indistinctly applicable to all products, such as those concerning product characteristics, product use, or sales modalities, which are not necessarily unlawful.

Article 34 TFEU aims to eliminate all obstacles to the free movement of goods and, in particular, those that specifically target imported products or apply to imported and domestic products under different conditions, making the marketing of imported products more difficult or costly.

ECJ, Case 132/80 NV United Foods and PVBA Aug. Van den Abeele Judgment of 7 April 1981, LawLex200900001520JBJ.

All trading rules enacted by Member States which are capable of  hindering, directly or indirectly, actually or potentially,  intra-community trade are to be considered as measures having an effect  equivalent to quantitative restrictions.

ECJ, Case 8/74  Benoît and Gustave Dassonville, Judgment of 11 July 1974, LawLex200500005388JBJ.

What is a measure having equivalent effect?

National measures that specifically or at least more heavily affect imported products than domestic products are inherently discriminatory. Some measures that appear restrictive are not discriminatory as long as they meet a specific need of the products in question or do not impose additional difficulties for the importation of the products.

Advice: In practice, measures specifically applicable to imported products include:

the requirement of specific import formalities;

the requirement of specific financial conditions;

the indication of origin specific to imported products;

measures intended to favor or limit national production.

In what cases can national measures be classified as discriminatory measures?

Since the “Cassis de Dijon” ruling, the prohibition of Article 34 TFEU applies to any commercial regulation likely to hinder trade between Member States, whether or not it is indistinctly applicable to domestic and imported products, as long as it is not necessary to meet imperative requirements “relating in particular to the effectiveness of fiscal supervision, the  protection of public health, the fairness of commercial transactions and  the defence of the consumer” or cannot be justified under Article 36 TFEU.

The Keck and Mithouard ruling, however, limited the prohibition to the characteristics of the product: a regulation concerning the selling arrangements—and not the conditions related to the product—that applies in a non-discriminatory manner to all operators and operations is not likely to constitute a measure having an effect equivalent to a quantitative restriction . By opting for a classification control based on the nature of the state measure, the Court reduced the scope of the Cassis de Dijon case law, which now only applies to national rules directly concerning products and is inapplicable to those related to their marketing.

The system established by the Keck and Mithouard ruling has the advantage of maintaining the effectiveness of the Dassonville case law with regard to any disguised quantitative restriction while exempting general commercial legislation from its undertaking.

The national measure that limits or prohibits certain methods of selling at a loss cannot be considered a measure having equivalent effect as long as it is indistinctly applicable to both domestic and imported products and affects in the same way, in law and in fact, the marketing of domestic products and products from other Member States.

ECJ, Case C-267/91 Keck and Mithouard, Judgment of 24 November 1993, LawLex201100000270JBJ.

Is a national regulation indistinctly applicable to imported products and domestic products likely to hinder the free movement of goods?

Traditionally, “characteristics” of the product are understood to mean name, shape, dimensions, weight, composition, presentation, or packaging.

Since the Cassis de Dijon ruling, even if indistinctly applicable to domestic products and legally manufactured imported products in another Member State, national legislations directly concerning products are likely to hinder trade between Member States if they are not justified by mandatory requirements.

Advice: The following are generally classified as product characteristics:

obligations regarding packaging waste collection or deposit ;

A national regulation requiring retailers to adhere to certain retail prices, which disadvantages the sale of imported products only on the market, can only be justified for the reasons provided in Article 36 TFEU and not by imperative requirements.

ECJ, Case 231/83 Cullet et Chambre syndicale des réparateurs automobiles et détaillants de produits pétroliers, Judgment of 29 January 1985, LawLex200400003563JBJ.

The legislation that prohibits the marketing of bread on the national territory with a moisture content exceeding or an ash content below certain levels, or that contains certain ingredients such as bran, requires differentiated production depending on the destination of the bread and constitutes a measure having an effect equivalent to a quantitative restriction.

ECJ, Case C-358/95 Morellato, Judgment of 13 March 1997, LawLex200900000441JBJ.

National rules which replace a global system for the collection of  packaging waste with a deposit and return system do not concern selling  arrangements insofar as they oblige the producers concerned to alter  certain information on their packaging.

ECJ, Case C-309/02 Radlberger Getränkegesellschaft mbH & Co. and S. Spitz KG., Judgment of 14 December 2004, LawLex200900001450JBJ.

A national law requiring the use of a specific language for the  labelling of foodstuffs is contrary to Article 34 TFEU and to the  Directive relating to the labelling of foodstuffs where it does not  allow for the possibility of using another language easily understood by  purchasers or of ensuring that the purchasers are informed by other  means.

ECJ, Case C-366/98 Criminal proceedings against Geffroy and Casino France SNC, Judgment of 12 September 2000, LawLex200700001634JBJ.

Which product characteristics are covered by the prohibition?

Case law distinguishes between the characteristics of the product and its use. Regulation that neither aims nor results in treating products from other Member States less favorably, but restricts the use of a product on national territory, constitutes a measure having equivalent effect and is contrary to Article 34 TFEU, insofar as it may, depending on its scope, have a considerable influence on consumer behavior, who will have only a reduced interest in purchasing the product in question: by making the use of a product marginal, or even hypothetical, on its territory, the national measure discourages its consumption and thus its importation .

The prohibition on the use of a motorcycle with a trailer specially designed for it constitutes a measure having an effect equivalent to quantitative  restrictions on imports of that kind of trailer, where it has a  considerable influence on the behavior of consumers such as closing the  access of that product to the domestic market.

ECJ, Case C-110/05 Commission v Italy,  Judgment of 10 February 2009, LawLex200900002316JBJ.

Can measures concerning the use of a product constitute a measure having equivalent effect?

Since the Keck and Mithouard ruling, case law establishes a distinction between selling arrangements and product characteristics, with the former benefiting from a presumption of legality due to their looser connection with the free movement of goods. The concept of selling arrangements includes methods of promotion, distribution, and more generally, the conditions of marketing the product .

The presumption of legality enjoyed by sales modalities is not, however, irrebuttable. The European judge cannot immediately exclude the prohibition of Article 34 TFEU without verifying that the national measure, although indistinctly applicable, does not affect the marketing of imported products differently and more heavily, both in law and in fact.

Council: The following have been classified as terms of sale:

regulations setting a single sale price ;

rules prohibiting online marketing  or by correspondence ;

the rules prohibiting television advertising for certain economic sectors .

A national provision which entirely prohibits certain selling  arrangements such as television advertising does not fall within the  scope of application of Article 34 TFEU unless it affects in the same  manner, in law and in fact, the marketing of domestic products and of  those from other Member States.

ECJ, Case C-34/95 Konsumentombudsmannen (KO), Judgment of 9 July 1997, LawLex200900000391JBJ.

An Austrian rule which prohibits importers of German-language books from  fixing a retail price below that fixed or recommended by the publisher  for the State of publication is contrary to Article 34 TFEU, since it  prevents Austrian importers and foreign publishers from fixing minimum  retail prices according to the conditions of the import market, whereas  the Austrian publishers are free to fix themselves, for their products,  such minimum retail prices for the national market.

ECJ, Case  C-531/07 Fachverband der Buch- und Medienwirtschaft, Judgment of 30 April 2009, LawLex200900002356JBJ.

The national regulation prohibiting the marketing of contact lenses via the internet constitutes a measure having an effect equivalent to a quantitative restriction.

CJEU, Case C-108/09 Ker-Optika bt, Judgment of 2 December 2010, LawLex201100000293JBJ.

The prohibition on mail-order sales of medicinal products in order to reserve the marketing exclusively to  pharmacies is contrary to Article 34 TFEU insofar as it impedes access to the market for products from other Member States more than it impedes  access for domestic products.

ECJ, Case C-322/01 Deutscher Apothekerverband eV v 0800 DocMorris NV and Waterval Judgment of 11 December 2003, LawLex200900000268JBJ.

National legislation that prohibits television advertising in the distribution sector concerns the selling arrangements of products insofar as it prohibits a form of promotion of a certain marketing method.

ECJ, Case C-412/93 Société d'Importation Edouard Leclerc-Siplec, Judgment of 9 February 1995, LawLex200900000745JBJ.

Are terms of sale subject to the prohibition of Article 34 TFEU?

Any national measure that establishes a difference in treatment between the domestic trade of a Member State and its export trade, in such a way as to ensure a particular advantage to national production or the domestic market of the State concerned, constitutes a measure having an effect equivalent to a quantitative restriction on exports, regardless of the purpose for which it was instituted. Article 35 TFEU targets both obstacles erected at the border or in its immediate vicinity and those implemented within the exporting State when a border crossing is envisaged.

In the Groenveld ruling, the Court of Justice subjected measures having an effect equivalent to a quantitative restriction on exports to a specific regime, even though Articles 34 and 35 TFEU are identically worded. According to the Union judicature, the prohibition in Article 35 TFEU does not apply to national measures that do not involve any difference in treatment between products intended for export and products marketed within the Member State concerned .

The Court of Justice, however, revised its interpretation by aligning the scope of application of Article 35 TFEU with that of Article 34. Henceforth, the prohibition of Article 35 applies even if the measure indiscriminately targets exports and domestic sales, unless it is justified by overriding requirements .

A national provision prohibiting all producers from having in stock,  preparing and processing products is not a measure having an equivalent  effect to quantitative restrictions on exports, insofar as the  prohibition is applied objectively to the production of goods of a  certain kind without drawing a distinction depending on whether such  goods are intended for the national market or for export.

ECJ, Case 15/79 P.B. Groenveld BV, Judgment of 8 November 1979, LawLex200900001563JBJ.

Even if a national provision prohibiting the supplier from requiring the  consumer's payment card number in a distance sale before expiry of the  statutory period for withdrawal is applicable to all traders active in  the national territory, it constitutes a measure having equivalent  effect to a quantitative restriction on exports insofar as the  consequences of such a prohibition are generally more significant in  cross-border sales.

ECJ, Case C-205/07 Criminal proceedings against Gysbrechts and Santurel Inter BVBA, Judgment of 16 December 2008, LawLex200900001109JBJ.

What is meant by a measure having an effect equivalent to a quantitative restriction on exportation?

The Treaty on the Functioning of the European Union establishes, in Article 36, genuine exceptions to the free movement of goods. While framing the legal exceptions, the court has relaxed the principle of prohibition, which has led it to introduce, alongside the justifications of Article 36 TFEU, a number of judicial exceptions. To these legal and judicial limits are added those based more generally on the general principles of law or the theory of abuse of rights.

The principle of free movement of goods, a fundamental freedom enshrined by the Treaty, must be reconciled with fundamental rights, which both the Union and its Member States are obliged to respect. Thus, the protection of fundamental rights, such as the freedoms of expression and assembly (Art. 10 and 11 ECHR), may justify a restriction on the free movement of goods .

According to the theory of abuse of rights, a Member State is entitled to take restrictive measures to prevent some of its nationals from attempting to evade the reach of its national legislation by abusively or fraudulently invoking European norms. National courts may, on a case-by-case basis, based on objective elements, consider the abusive or fraudulent behavior of the persons concerned to deny them the benefit of European law provisions, but must also take into account the objectives pursued by the relevant European provisions .

The protection of fundamental rights such as the freedom of expression and the freedom of assembly may justify a restriction to the free movement of goods.

ECJ, Case C-112/00 Schmidberger, Internationale Transporte and Planzüge Judgment of 12 June 2003, LawLex200900000377JBJ.

A regulation fixing the price of books that are published in France,  then exported to another Member State, then re-imported to France, comes  under the free movement of goods, unless it is established that those  books were exported for the sole purpose of re-importation in order to  circumvent national legislation.

ECJ, Case 229/83 Association des Centres distributeurs Édouard Leclerc and Thouars Distribution SA Judgment of 10 January 1985, LawLex200500003763JBJ.

Are there exceptions to the principle of prohibiting measures having equivalent effect?

Article 36 TFEU provides an exhaustive list of legal exceptions to the principle prohibiting measures having equivalent effect:

Public morality, public policy and public security

Reasons of public morality are widely accepted by the Court of Justice, which acknowledges that Member States must be able to freely assess the level at which they intend to defend public morality within their territory. It is therefore up to them to determine the requirements according to their own scale of values and in the form they have chosen, while respecting the principle of proportionality .

Endowed with exclusive competence for maintaining public order and safeguarding internal security, Member States enjoy a wide margin of appreciation to determine, based on the particularity of social contexts and the importance they attach to a legitimate objective under European law, the measures likely to achieve concrete results. The concept of public order is, however, framed . It is also not sufficient for national regulation to be accompanied by criminal sanctions to fall under public order. Finally, the Member State must demonstrate that it cannot address the disturbances it invokes by other means at its disposal.

Protection of public health and human life

The protection of public health justifies health controls at borders. It ranks first among the goods or interests protected by Article 36 TFEU . In the absence of harmonization, each Member State decides the level at which it intends to ensure the protection of health and life of individuals, while taking into account the requirements of the free movement of goods within the Union . The fact that one Member State has adopted less strict rules than those imposed by another Member State does not, however, mean that the latter are disproportionate .

The protection of animal welfare constitutes a legitimate objective of general interest enshrined in Article 13 TFEU. A national measure is deemed disproportionate in relation to the objective of protecting animal health when the risk of contamination is extremely low or when less restrictive measures exist .

The needs of plant production must, in all cases, be reconciled with the requirements of protecting human and animal health, taking into account the advances in scientific knowledge in this area .

Member States may define their national treasures and take the necessary measures to ensure their protection within the internal market. National treasures are understood to be those with artistic, historical, or archaeological value .

A uniform control of the export of cultural goods at the external borders of the Union is organized by Regulation No 116-2009, which applies not only to national treasures defined by the Member States but also to various categories of cultural goods.

In order to combat the illicit trafficking of works of art, the preventive control of exports is supplemented by Directive No 2014-60, which organizes the return of cultural goods that have unlawfully left the territory of a Member State.

Protection of industrial and commercial property

Exclusive rights, industrial and commercial property rights are also rights established nationally and thus likely to create an obstacle to the free movement of goods within the Union . The exercise of intellectual property rights must not hinder the free movement of goods beyond what is necessary to safeguard the rights that constitute the specific subject matter of such protection. The scope of this subject matter is defined by reference to the theory of exhaustion of rights: the exclusive right conferred on the holder of an intellectual property right is exhausted for the products concerned after their first placing on the market within the territory of the internal market . The specific subject matter of the right, which consists notably in the first placing on the market of the product, is lawful under European law, as long as it corresponds to its essential function .

Article 36 TFEU is to be interpreted strictly: only the reasons listed in the text may be invoked. These can only be non-economic scenarios, unless the functioning, not only of the State's economy but especially of its institutions and essential public services, and the survival of its population depend on it . The burden of proof lies with the State invoking the exception to enforce the restriction on the entry of a product into its territory.

The judge also applies a proportionality test comparable to that implemented in competition law under Article 101, paragraph 3: for the restriction not to constitute a means of arbitrary discrimination or a disguised restriction, it must be both directly related to the interest to be protected, essential, and not disproportionate. A direct relationship must exist between the restrictive measure and the interest to be protected . A risk of harm to the public interest must be established. The judge also verifies that the sought protection is essential and cannot be ensured by other means . Finally, even if admitted in principle, the restrictive measure in question must not exceed what is necessary to ensure the protection of the interests concerned .

National provisions which, on grounds of public morality, prohibit any imports of indecent or obscene goods do not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States where these goods are not lawfully traded within the national territory concerned.

ECJ, Case 34/79 Regina v Henn and Darby, Judgment of 14 December 1979, LawLex201100000327JBJ.

A mandatory public policy provision cannot be invoked by a Member State to protect its economic interests.

ECJ, Case 288/83 Commission v Ireland, Judgment of 11 June 1985, LawLex200900001503JBJ.

The concept of public policy within the meaning of Article 36 TFEU cannot be extended to include considerations related to consumer protection.

ECJ, Case 177/83 Kohl KG, Judgment of 6 November 1984, LawLex200900002210JBJ.

The protection of exclusive rights under a patent justifies the  possibility given to its proprietor to prevent the marketing in a Member  State of a product which has been manufactured in another Member State  by the holder of a compulsory licence.

ECJ, Case 19/84 Pharmon BV, Judgment of 9 July 1985, LawLex200500004429JBJ.

An undertaking established in a Member State may legitimately enforce, under a trademark right and the right to a trade name, protected by the legislation of that State, against the importation of products from an undertaking established in another Member State and bearing, under the legislation of that State, a designation likely to cause confusion with the trademark and trade name of the first undertaking, provided, however, that there is no restrictive competition agreement or legal or economic dependency relationship between the undertakings concerned, and that their respective rights have been created independently of each other.

ECJ, Case 119/75 Société Terrapin (Overseas) Ltd., Judgment of 22 June 1976, LawLex200400003454JBJ.

The very difficult socio-economic context in which the national fruit and vegetable market would have found itself after the accession of another Member State cannot justify the failure to take all necessary and proportionate measures in order to prevent the free movement of goods from being obstructed by actions by private individuals.

ECJ, Case C-265/95 Commission and Spain v UK and France, Judgment of 9 December 1997, LawLex200900001333JBJ.

A restrictive measure on trade between Member States cannot be justified by a Member State's concern to ensure the survival of an undertaking.

ECJ, Case C-324/93 The Queen v Secretary of State for Home Department ex parte Evans Medical Ltd and Macfarlan Smith Ltd, Judgment of 28 March 1995, LawLex200900000291JBJ.

A restrictive national law which is designed to achieve objectives of an economic nature concerning both energy policy and research and development policy, cannot be justified under Article 36 TFEU.

CFI, Case 103/84 Commission v Italy, Judgment of 5 June 1986, LawLex200900001439JBJ.

A national measure prohibiting the import and marketing under the designation “vinegar” of vinegar other than wine-based vinegar cannot be justified by the objective of protecting public health where  prohibited vinegars contain no harmful substances and are normally consumed in other Member States.

ECJ, Case 193/80 Commission v Italy, Judgment of 9 December 1981, LawLex200900001639JBJ.

A general prohibition on the marketing of certain pasta products that  may contain chemical additives or colorants cannot be justified by the  will to protect trading where the exclusive use of an appropriate  description would allow the consumer to make a choice in full knowledge  of the facts.

ECJ, Case 407/85 3 Glocken GmbH et Gertraud Kritzinger, Judgment of 14 July 1988, LawLex200900002319JBJ.

A national regulation that prohibits the marketing of foodstuffs to which vitamins have been added is proportionate to the objective of protecting public health, provided that marketing authorizations are granted when the addition of vitamins meets a real technological or nutritional need.

ECJ, Case 174/82 Criminal proceedings against Sandoz BV, Judgment of 14 July 1983, LawLex200900001604JBJ.

The existence of cooperation between the authorities of the Member States making it possible to facilitate and simplify frontier checks whilst allowing the authorities of the importing Member State to satisfy themselves that the goods imported comply with the requirements of that State's health legislation, nonetheless cannot impair the right of each individual Member State to enact and apply its own legislation to protect public health.

500 Questions - Business Law

248. Are all restrictions, regardless of their severity, prohibited?

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248. Are all restrictions, regardless of their severity, prohibited?

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