EU Single Market: Rules on Tariffs, Taxes, and Non-Tariff Barriers

The aim is to create a single market in the EU where products can move as if there were no borders. This means NO:

• Customs duties between countries
• Hidden charges (CHEEs)
• National rules that make trade harder (MEEs)
• Taxes that discriminate against foreign products

Exceptions are only allowed when they are justified (e.g., health, safety, morality, etc.) and pass the proportionality test.

Prohibition of Tariffs and Charges (Art. 30 TFEU)

Prohibited between Member States:

• Customs duties (aranceles): A monetary charge for crossing a border. Always prohibited, even if small or non-protectionist.
• CHEEs (Charges Having Equivalent Effect): An impuesto disfrazado de otra cosa (tax disguised as something else). A unilateral charge on imports/exports not linked to a real service. Also prohibited under Article 30.

How the ECJ Determines if a Charge Is a CHEE

A charge is a CHEE if it meets all these four criteria:

• Pecuniary: It is a payment.
• Unilaterally imposed: By the State only.
• Frontier-related: Because the goods cross a border.
• Trade-restrictive: It makes trade harder (even a little bit).

When a Charge Is NOT a CHEE

It is allowed if:

1. It is part of general internal taxation (Art. 110 TFEU).
2. It reflects a real, optional, and specific service actually rendered:
   • Optional: The importer can choose it.
   • Specific: Not a general service.
   • Genuine: The service is really provided.
   • Proportional: The charge reflects the real cost only.
3. It is required by EU law, e.g., health or safety checks.

Internal Taxation Rules (Art. 110 TFEU)

An EU country cannot charge higher internal taxes on foreign products than on its own.

Types of Prohibited Taxation

1. Direct discrimination: The tax is clearly higher for imported products.
2. Indirect discrimination: Looks neutral, but affects imports more.

Criteria Used by the ECJ to Assess a Breach (Art. 110 TFEU)

• Are imported and national goods similar? If yes, they must be taxed the same.
• Do the goods compete in the same market? Even if they are not identical (e.g., wine and beer), they must be treated fairly.
• Is the tax higher for imported goods? If yes, it’s discriminatory and prohibited.
• Does the tax make people buy national goods more? If the tax encourages consumers to choose local products (even unintentionally), it creates a protective effect — this is not allowed.
• If it is non-discriminatory and looks neutral under EU law, then it is likely OK under Article 110.

Non-Tariff Barriers (NTBs)

Legal basis: Art. 34 TFEU prohibits import restrictions/MEEs. Art. 35 TFEU prohibits export restrictions/MEEs.

• Quantitative restriction: A rule that limits how many goods can be imported or exported. Not allowed.
• MEE (Measure Having Equivalent Effect): A rule that doesn’t set quantity limits, but makes trade harder (e.g., a label or packaging rule that targets imports). A national rule is an MEE if it meets three conditions simultaneously:
  • The rule comes from a Member State (national law).
  • It affects imports/exports, making it harder to sell foreign goods.
  • It makes trade more difficult (directly or indirectly).

Derogations (Art. 36 TFEU)

Some trade restrictions are allowed if they protect important public interests, like:

• Public morality (society values), public order, or security.
• Protection of health or life of people, animals.
• National treasures (cultural value).
• Industrial/commercial property (copyright, patents).

Proportionality Test (4 steps) to See if the Restriction is Justified

1. Legitimate aim? Is the goal valid (e.g., health)?
2. Suitable? Does the measure help achieve the goal?
3. Necessary? Is there a less restrictive way?
4. Strictly proportionate? Does the benefit justify the trade restriction?