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19th March 2020
Covid-19 Internal Market

Analysis: “COVID-19 and the Free Movement of Goods: Which Prevails?” by Peter Oliver

All over the world, individuals and institutions are being tested to the extreme by the scourge that is the coronavirus, which is reputedly set to be the worst pandemic for a hundred years.   The EU is no exception. Not without some justification, public opinion has berated the EU institutions for being slow to act and for a lamentable lack of coordination.

The Italians, who are suffering far more than any other European nation, have had good reason to feel that they have been let down by the other Mmber States and the EU itself once again. For instance, not a single Member State responded positively to Italy’s urgent request for clinical masks; to make matters worse politically, China sent some instead.  And it would be a gross understatement to say that the Italian political class did not take kindly to Christine Lagarde’s formal announcement that the Member States were on their own and could not expect any help from the ECB. Politically, this glaring lack of solidarity is disastrous, as it is likely to fuel further Europhobia in a country where it is already rampant.

Fortunately, there are signs that the tide is turning, however. An array of EU measures designed to tackle both the medical and the economic aspects of the crisis are now in the pipeline, and at least one has already been adopted.

This post focuses on the internal market, and more specifically the free movement of goods.  Let us start with the ban imposed by Germany at the beginning of this month on the export of all clinical masks and certain other protective clothing, which were in short supply. Manifestly, such a measure is caught by the prohibition in Article 35 TFEU on quantitative restrictions on exports or measures of equivalent effect.  But is it justified ? Needless to say, the only relevant ground of justification under Article 36 (including the mandatory requirements) is public health.

In a Communication published on Friday the 13th, the Commission expressed the view that by itself an export ban of such items is not justified, since it would fail to ensure that they would be available for those who most need them within the territory of the Member State concerned. The Commission added that price controls might be effective in ensuring that these products are affordable. However, an export ban could hardly be faulted as a matter of law, if combined with such flanking measures.

Each Member State can rely on Article 36 to protect the health of its own population. So long as an export restriction is genuinely appropriate and justified to achieve that end, nothing in the Treaties precludes a Member State from relying on it to the detriment of the population of its fellow Member States.  In the celebrated case of Dassonville, Advocate General Trabucchi asserted in his Opinion that Member States can rely on Article 36 ‘only for the purpose of the protection of their own interests and not for the protection of interests of other States’.   After all, the very essence of Article 36 is that it is an exception to free movement.

Nevertheless, the harsh principle that under Article 36 and its counterparts relating to the other fundamental freedoms each Member State can fend for itself clashes directly with the ideal of an ‘ever closer union’ enshrined in Article 1 TEU.  This necessarily implies solidarity between Member States at all times, especially times of crisis – but that has been sorely lacking in the euro and migrant crises that have struck the EU in the past few years. Sadly, solidarity is no more than an aspiration and cannot prevail over the legal reality of Article 36.  In short, what the Member States may lawfully do as a matter of pure law is at loggerheads with what is politically wise and expedient.

Consequently, the following statement in the Commission’s communication of Friday the 13th might well have been no more than a pious hope:

‘Measures regulating the concerned markets with adequate mechanisms to channel essential goods where they are needed the most both within the Member States and to qualified buyers in other Member States, can be a positive contribution to the overall coordinated European approach to help saving lives’.

However, as it turned out, Germany was persuaded to change its position radically and has even undertaken to send at least 400,000 of them to Italy together with a vast array of other medical equipment. (Germany is also said to have promised the Commission to repeal its export ban, although it is not altogether clear that it has done so yet.)

According to the Spiegel, it is no accident that at the same time the Commission adopted Implementing Regulation 2020/402, which prohibits exports from the EU of such ‘personal protective equipment’ for six weeks, subject to the grant of a waiver by the Member State concerned.  The link between the two developments is clear: once goods have left the territory of a Member State, it cannot be sure that they will remain in the EU. This measure is the subject of an earlier post by Isabelle van Damme.

We can now turn to the Commission’s Guidelines for border management measures to protect health and ensure the availability of goods and essential services.  This document is not couched in legal terms and refers to hardly any legal provisions.  In these circumstances, it is hard to interpret the word ‘should’, which is frequently employed in the text: now that native English speakers are a dying breed in the EU’s institutions, the word ‘should’ appears to be used in some non-binding documents to mean ‘must’.

Only the passages of the Guidelines concerning the free movement of goods can be considered here.  These passages are Part I entitled ‘Transport of goods and services’ and Part II (‘Supply of goods’).  In addition to stating that restrictions on transport should be transparent, reasoned, proportionate and non-discriminatory, Part I states:

‘Control measures should not undermine the continuity of economic activity and should preserve the operation of supply chains. Unobstructed transport of goods is crucial to maintain availability of goods, in particular of essential goods such as food supplies including livestock, vital medical and protective equipment and supplies’. (emphasis in the original).

Part II of the Guidelines begins as follows:

‘Member States should preserve the free circulation of all goods. In particular, they should guarantee the supply chain of essential products such as medicines, medical equipment, essential and perishable food products and livestock. No restriction should be imposed on the circulation of goods in the Single Market, especially (but not limited to) essential, health-related and perishable goods, notably foodstuffs, unless duly justified …

No additional certifications should be imposed on goods legally circulating within the EU single market. It should be noted that, according to the European Food Safety Authority, there is no evidence that food is a source or a transmission source of Covid-19′. (emphasis in the original).

Almost every single sentence of these passages contains the word ‘should’.  Given the very general nature of the language used and the lack of references to legal provisions, one can only infer that the action which the Member States ‘should’ take or refrain from taking is unlawful in the eyes of the Commission, subject to justification in exceptional circumstances.

Apart from export bans, a major issue now is border controls, which are specifically mentioned in the passage in Part I quoted above. Chancellor Merkel is reported as stating that, during yesterday’s summit by videoconference, ‘all parties said they want to address this problem,’ and that leaders agreed they ‘will do all they can that the waiting time at the borders be kept to a minimum’..  She is said to have added that, if this problem is not solved, there would be ‘very serious consequences for our economy’.

Let us take the example of Poland.  If my understanding is correct, that Member State has imposed import controls so draconian that lorries are forced to queue for as long as 18 hours to enter the country.  If that is indeed the case, it is hard to imagine that such rigorous controls could be justified, particularly in the light of the EFSA’s declaration that no evidence exists of food being a vector of COVID-19.  Can we expect yet further infringement proceedings against Poland (for breach of Article 34 TFEU, this time), spiced with another application by the Commission for interim relief ?

Peter Oliver is Honorary Professor at the Université Libre de Bruxelles and Barrister at Monckton Chambers.

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