the internal market and free movement of capital Flashcards
(13 cards)
general modes of international trade
-generally states have an interest in maintaining stable trading relationships and in ensuring that these relationships work in the national interest
-trade between nations can be subject to intenational rivalry- leading to the use of economic sanctions, tarriff barriers (barriers to free trade) and non-tarriff barriers to trade (charging percentage on goods as an entrance fee)
(this places domestic goods at an advantage)
-free trade/internal market- movement of goods,services and people within a devine territory
craig and burcas threefold characterization on the organization of trade co-operation between the states
- create a free trade area- removal of custom duties and quotas on the quantity of import
(world trade organiser abolishing tarriffs and discrimination of international goods)
-also possible for a free trade area to regulate non tariff barriers to trade (measures other than tariffs that restrict trade (e.g rules on product requirements, labelling requirements..)
-harmonizes rules and regulations - custom union- similar to free trade but include an additional elemet which is an agreed common external tariff for dealing with countries outside the customs union (harmonized entrace fee across all member states)
-once goods entered the boarder of EU, do not need to pay to enter other MS
3.common market- all of the above plus adds free movement of persons, services and capital to the free movement of goods enabled by the free trade area (acess to all market citizens of the EU)
- craig and de burca purpose of common market- optimal allocation of resources for the EU
-identity of MS balanced against the interests of the common market
policy breadth and spillover
-the internal market of the EU consists of the free movement of the four factors of production: goods, persons, services and capital
-starting with these means that other areas of policy are effected aswell (e.g production of goods links to who produces these goods which may need to harmonize something such as workers rights)
-the EU has a wide set of policies that accopmay the internal market (because integration in one area requires integration in another to ensures the benefits from the previous forms are secured)- neo functionalist theory of intergration
examples of these policies
- concerned with economic and trading functions- regulations of agriculture and fisheries
-also includes competition policy (ensures that companies engage in fair competition and do not abuse dominant market position) and the regulation of state aid
2.concerned with market correcting functions -(if the internal market operates without qualification this could result in serious economic disparities beyween different regions of the EU and the reduction of social and environmental standards)
-if new MS join the EU and were subject to the same marketing rules they would have to compete against the more established states, the EU therefore can allocate funds to these states to catch up and all EU citizens enjoy a similar level of security and rights
rationale for the policies
found in the treaties- ‘ever closer union’ of the people of Europe art1 TEU
initillaly for trade but not focused on a harmonized EU for its citizens
freedom 1. free movement of goods
2 sets of provisions
1. deals with fiscal barriers (government imposed financial measures that increase cost of traded goods/services)
- prohibits quotas and quantitative restrictions (similar to tariffs)
-encompasses national rules restricting community trade
- german liqour case- germany created a legal barrier for the consumer to have access to the product, so violated the free market idea
- free movement of persons
-covers issues like the right to reside in different EU countries and the right to non-discrimination
-important for business sector to have workers from everyone, and the right of the individual to go somewhere and build a new future (creates peace)
-comes from impetus given by the EU citizenship provisions created by the maastricht treaty
- free movement of establishment and services
-governs the rights of companies and individuals to set up and operate companies in other MS without discrimination
-services are temporary innature and commercial
- free movement of capital (cash)
- free movement rules without certain complex features
-provides an opportunity to introduce some key concepts in internal makret law
-regulates the movement of capital and payments
-capital- investment in bonds, shares or real estate and other types of tranfers like loans or gifts..
example of capital movements- direct investment in companies, or real estate or operations in securities (commission v UK 2003)
-sometimes a problem deciding whether the type of rule is regarding establishment or capital
-but the deciding factors is what the main purpose of the money is (if investments accords controlling influence then establishement cadbury Schweppes 2006)
-but courts generally take a case by case approach
-absence of controlling interest will not mean that freedom of capital provisions automatically apply instead (A and B 2007)
- payments- monetary counyerpart paid in reciept of goods or services
distinction accepted in Luisi and Carbone 1984
treaty provisions:
1. art 63 TFEU- the basic right to free movement
2.art 64 TFEU- provisions setting the basis for regulating capital movement with 3rd party states
3. art 65 TFEU- the justification for restrictions on capital movements imposed by MS
- they have direct effect- sanz de lera 1995 (vertical)
article intended to apply to cross border movements aswell as movement of capital to third countries (binding on both home and host states)
substantive provisions for all market freedoms
- non discrimination- distincly applicable measures are prohibited) (one member states should not discriminate against money coming form another state, or a business from one state to another…)
- even then measures not discriminatory, they may be caught by the article if they are liable to make cross boarder movements less attractive- Van Putten 2012
justifications
any possible infringement of the substantive free movement protections or the protection against discrimination can be justified
-justified by public policy exemptions set out by the treaty
-infringements that are not discriminatory can be found to be compliant provided by the measure is based on overriding grounds of public interest
express treaty derogations
article 65 TFEU- ste out public policy and public security exemptions
e.g italian govenment attemoted to justify national rules that prohibited foreign nations from acquiring buildings in zones designated as a military importance- Alfredo Albore (helpd not proportionate)
proportionality assessment-
1. whether a measure is appropriate
2. whether it is necessary to achieve the objective in question
art 65 specific justifications for capital movement restrictions- where they intend to prevent infringements of national laws in the field of taxation and financial supervision
public policy justification
overriding requirements include-
1. preservation of agricultural communities- Ospelt 2003
2. pluralistic and non-commercial programming- verenging veronica 1993
3. transparency of the mortgage system- Trummer and Mayer 1999
