Environmental law measurements conflicting free movement of goods

“The Commission of the European Communities v Republic of Austria”, about free movement of goods.

My purpose in this legal report is to analyse in the traditional legal method this case, in which an action against the Republic of Austria was brought before the Court of Justice of the European Communities on 24 July 2003 by the Commission of the European Communities, represented by Claudia Schmidt of the Commission’s Legal Service, with an address for service in Luxembourg. The question that arises is: Can a Member State of the European Union adopt a legislation that is incompatible with Community law obligations in pursuit of the environment?

“Environmental law may create barriers to trade”, and from what from the internal market lessons, it is clear that this is something that the European Union prohibits. The control of fiscal barriers, prohibition of certain forms of discriminatory taxation, state aid rules, procurement law, and the free movement provisions are clear examples of treaty stipulations that aim to ensure the functioning of the internal market. For instance, Article 34 of the Treaty of the Functioning of the European Union stipulates the prohibition of quantitive restrictions between member states on imports and all measures having equivalent effect. National environmental protection measures may amount to such prohibitive trade restrictions.[1]

Austria, a Member State of the European Union, in order to ensure the quality of ambient air in the zone concerned, adopts legislation (on the basis of the Austrian “Immissionsschutzgesetz-Luft“, an Immission Control Act-Air [2]) prohibiting lorries of over 7.5 tonnes, carrying certain goods, from driving on a road section of paramount importance; road that constitutes one of the main routes of land communication between certain Member States fails to fulfil its obligations under Articles 28 and 29 of the EC treaty.

This legislation dated 27 May 2003 meant a ban on the use by heavy goods vehicles carrying certain goods of a 46 km stretch of the A 12 Inntal motorway and it was prepared to apply to the vehicles covered with immeditate effect from the first day of August of said current year for an indefinite period of time, with the aim of reducing air pollution.

Such a prohibition was meant to obstruct the free movement of goods and, in particular, their free transit, and thus, it must be regarded as constituting a measure having equivalent effect to quantitative restrictions, incompatible with Community law obligations under the mentioned articles, unless that measure can be objectively justified. And, it is found that it cannot be justified by imperative requirements in the interests of environmental protection, because it has not been demonstrated that the aim pursued couldn’t have been achieved by other means, other measures less restrictive/stringent which appear equally suitable and present less of an obstacle to the freedom of movement (principle of proportionality).

The clames are based, among others, on the following articles:

Article 1.1 of the Council Regulation (EEC) No 3118/93:

1. Any road haulage carrier for hire or reward who is a holder of the Community authorization provided for in Regulation (EEC) No 881/92 shall be entitled, under the conditions laid down in this Regulation, to operate on a temporary basis national road haulage services for hire and reward in another Member State, hereinafter referred to respectively as ‘cabotage’ and as the ‘host Member State’, without having a registered office or other establishment therein.[3]

Article 28 EC: “Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.”

Article 29 EC: “Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States equivalent effect, shall be prohibited between Member States.”

Article 30 EC: “Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.”[4]

There is no definition of goods in the EC Treaty, but the ECJ has stated that the term refers both to a) Good originating in Member States and b) Good from third countries in “free circulation” in the Community.[5]

The applicant claims that the Court should[6]:

1. Rule that the imposition of a ban on the use of a section of the A 12 Inntal motorway between kilometre 20,359 in the Kundl local authority area and kilometre 66,780 in the Ampass local authority area by heavy goods vehicles with a total weight exceeding 7,5 tonnes which carry certain goods and declare its incompatibility with the Republic of Austria’s obligations under Articles 1 and 3 of Council Regulation (EEC) No 881/92, Articles 1 and 6 of Council Regulation (EEC) No 3118/93, and Articles 28 to 30 EC;

2. Order the Republic of Austria to pay the costs of the proceedings.

The Commission [6] takes the view that, in imposing this ban, the Republic of Austria has acted in breach of the abovementioned obligations of primary and secondary law.

The transit ban or the “pressure to use railways” creates additional delays and costs for the heavy goods vehicles and undertakings concerned. The ban mentioned thus, constitutes a manifest obstacle to the free movement of goods. The approach chosen by the country in applying the ban only to transit traffic, approximately 80% of which is effected by foreign hauliers, entails preferential treatment of the national or local movement of goods which produces indirect discrimination of the transport of goods by foreign carriers. That discrimination cannot be justified on the ground of environmental protection and because it has not been demonstrated that the aim pursued couldn’t have been achieved by other means less restrictive of freedom of movement, it must be found that Austria has infringed Article 28 EC.

On his book “EU Environmental Law and the Internal Market”, Nicolas de Saledeer analyses that “the judgement related to the prohibition imposed by Austria on the transit by trucks heavier than 7.5 tonnes along the said motorway, according to the national authorities the measure was justified by the obligation to comply with EU air pollution standards. Moreover, the Austrian measure concerned sought to promote combined road and rail transport across the Alpes. It transpired that the measure mainly affected the transport of goods between northern Italy and southern Germany, which thus transited through Austria, at the heart of the EU”. Subsequently, the Court limited itself to holding that the Austrian regulation was justified by a mandatory requirement.[8]

The cross-border requirement may also be fulfilled if the product is merely transiting the Member State in question. The Court has made it clear that the free movement of goods entails the existence of a general principle of free transit of goods within the EU.

Irrespective of the place where they are originally manufactured inside or outside the internal market, all goods, once they are in free circulation in the internal market, benefit from the principle of free movement.[9][10]

My conclusion is that this action taken by the Republic of Austria, while it represented a good intention from the government, it did not justify the means to an end because of its infringing the Community obligations stipulated within the European Union which Austria is a Member State of, and of article 34 TFEU (ex article 28 EC). Community obligations shall prevail when in the findings there is not a mesure objectively justified that could not have been done or implemented in a less restrictive way for the obligations that must be observed.

[1] http://class.coursera.org/europeanbusinesslaw-001/lecture/153

[2] Actual Immissionsschutzgesetz-Luft: https://www.ris.bka.gv.at/GeltendeFassung.wxe?Abfrage=Bundesnormen&Gesetzesnummer=10011027

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