Free Movement of Goods in the EU Internal Market: Legal Framework and Exceptions
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Homework type: Essay
Added: 18.01.2026 at 14:03
Summary:
Explore the legal framework of the EU’s free movement of goods, learn key exceptions, and understand how barriers impact trade in the internal market.
Internal Market – Free Movement of Goods within the European Union: Legal Framework, Barriers, and Exceptions
The formation of the European Union’s Internal Market is widely hailed as one of the most ambitious and transformative legal projects in recent European history. It stands as the embodiment of efforts towards integration following decades of division in Europe. The Internal Market—integral not just to the EU’s economic rationale but also to its political and cultural ambitions—aims to dismantle the borders that once separated national economies. Central to this project is the commitment to ‘the four freedoms’: the free movement of goods, services, capital, and persons. Of these, the free movement of goods (FMOG) sets the foundation; without hindrance to the flow of physical products, the concept of a single market would be little more than an aspiration.
This essay explores the legal structures underpinning the FMOG, considering both formal and practical barriers that continue to challenge the ideal of a borderless market. It further delves into the permitted boundaries of the principle: when may states justifiably impede this movement, and what are the wider implications for integration and national self-determination?
Legal Foundations of the Free Movement of Goods
The legal apparatus for the free movement of goods is primarily articulated within the Treaty on the Functioning of the European Union (TFEU). Article 28 establishes the Customs Union, eradicating customs duties on goods exchanged between Member States, and lays down a uniform system for trading with non-Member countries. Article 30 cements the prohibition of not only straightforward customs duties but also of any ‘charge having equivalent effect’ (CHEE), closing off any loopholes whereby states might impose quasi-tariffs not nominally described as such.Article 34 is further-reaching, outlaws ‘quantitative restrictions’ on imports and, importantly, all ‘measures having equivalent effect’ (MEQR), a term which has been subject to nuanced judicial interpretation over the years. Article 35 mirrors this for exports, while Article 110 addresses internal taxation, preventing discrimination against imported goods compared to domestic products.
The distinction between the Customs Union and the broader concept of the Internal Market—including FMOG—is critical. While the Customs Union ends tariff barriers, the Internal Market’s reach extends to eliminating behind-the-border restrictions such as regulatory divergence and discriminatory taxation. In effect, the Internal Market aspires to treat an Irish cheese in Italy no differently from an Italian cheese produced in Lombardy, at least in the eyes of the law.
Prohibited Barriers to the Free Movement of Goods
Customs Duties and Charges Having Equivalent Effect
The TFEU’s ban on customs duties is straightforward: direct tariffs at national borders must not exist between Member States. However, the more complex issue lies in identifying and outlawing charges which may not be tariffs in name but have the same protective function. The breadth of this principle is captured in the seminal *Van Gend en Loos* (1963), a decision that revolutionised European law by recognising the direct effect of Treaty provisions. Dutch authorities’ attempt to levy an increased tariff on imports from Germany was deemed contrary to what is now Article 30 TFEU.The Commission v Italy (Art and Cultural Items, 1968) case extended these principles, clarifying that all ‘goods’—including works of art—fall within this protective remit. The Italian government’s attempt to levy a fee on exports of artworks was struck down, an outcome with particular resonance in a country so rich in cultural heritage.
Charges Having Equivalent Effect are interpreted so widely that virtually any charge at the border which lacks an explicit EU legal authorisation would likely fall foul of Article 30, as the Court of Justice recognises the principle that economic competition within the EU must remain undistorted by protectionist mechanisms.
Quantitative Restrictions and Measures Having Equivalent Effect
Quantitative restrictions—such as quotas—are less common in the modern EU. However, MEQRs have presented greater difficulties. The definition was framed by the Court of Justice in the *Geddo* (1973) case: QRs refer to measures that set a fixed limit on imports or exports, whereas MEQRs encompass any national measure liable to hinder intra-EU trade.The *Dassonville* (1974) case articulated the famous ‘Dassonville formula’, under which any trading rule enacted by Member States capable of hindering, directly or indirectly, actually or potentially, intra-Community trade, qualifies as an MEQR. This is exceedingly broad: it catches not only explicit barriers but also requirements around product standards, labelling, packaging, and safety, if these measures pose obstacles to the introduction of perfectly legal goods from other Member States.
For example, if Portugal were to require all mineral water sold domestically to be in green bottles—with French sparkling water traditionally bottled in clear glass—this would, under Dassonville, constitute an MEQR, unless objectively justified.
Internal Taxation and Non-Discrimination
Article 110 TFEU seeks to address the subtler problem of fiscal discrimination. Even without customs duties or QRs, Member States could tilt the playing field through skewed tax regimes. Here, the crucial principle is one of equal treatment between domestic and imported goods. In *Commission v Ireland* (1980), the EU found fault with Irish regime that, in effect, afforded fiscal preference to domestically produced alcoholic beverages. Similarly, the case of *Commission v UK* (1983) focused on differences in excise duties applied to wine and beer, products widely consumed but not always produced in the same countries.At the heart of these provisions lies a balance between respecting national autonomy over taxation and ensuring unimpeded market access. Tax authorities must tread carefully: while differentiated tax regimes may serve legitimate national objectives (such as public health), they cannot serve as disguised trade barriers.
Permissible Exceptions to the Free Movement of Goods
Of course, few rights are absolute, and the free movement of goods admits exceptions within carefully delineated confines. Article 36 TFEU provides an explicit list under which Member States may justify derogations, including grounds such as public morality, public policy, public security, and the protection of health and life of humans, animals or plants, among others. Yet, the Court of Justice has always insisted that these exceptions are to be interpreted narrowly, lest they become vehicles for disguised protectionism.The principle of proportionality governs the application of Article 36: the national measure must be genuinely necessary and must not go further than required. In *Bresciani* (1976), Italy’s health inspections on imported animal products were only allowed to the extent that the cost related directly to a service benefitting the importer, not to the general public. Likewise, *Cassis de Dijon* (1979) is a landmark, not only for confirming the proportionality and necessity tests but also for giving birth to the doctrine of ‘mandatory requirements’—a realm of public interest considerations (such as consumer protection and environmental policy) which, while not listed in Article 36, nonetheless justify certain restrictions.
The *Keck and Mithouard* (1993/8) judgment marked a further refinement by distinguishing between product requirements (generally regarded as MEQR) and ‘selling arrangements’ (which may fall outside Article 34's prohibition if they apply equally to all traders operating within the national territory).
The Role of Harmonisation and Mutual Recognition
The ultimate answer to many of the problems of national divergence—especially regarding technical standards—has been the process of harmonisation. Through directives and regulations, the EU seeks to provide uniform standards, removing the justification for national barriers. For instance, the standardisation of safety requirements for toys means children’s toys produced in Poland and sold in Belgium must meet the same safety obligations.Where harmonisation is absent, the principle of mutual recognition, crystallised in *Cassis de Dijon*, takes on renewed importance: a good lawfully produced and marketed in one Member State should, in principle, be allowed for sale throughout the Union, unless a state can show an overriding public interest concern. In practice, this maximises consumer choice and market efficiency by removing the costs and delays of adapting to a multitude of national rules.
Practical Challenges and Contemporary Developments
Yet, despite a comprehensive legal framework, the FMOG is not always frictionless. Non-tariff and ‘hidden’ barriers remain: divergent certification procedures, inconsistent enforcement, and administrative hurdles can result in delays and costs that disproportionately affect small and medium enterprises. Contemporary challenges—ranging from digitalisation (for instance, how to classify goods accompanied by digital services) to the growing prominence of environmental standards—have further complicated the landscape.The withdrawal of the United Kingdom from the EU (Brexit) has thrown these issues into sharper focus. The re-imposition of customs checks and regulatory divergence at the UK-EU border has brought back into public consciousness the practical realities of a fragmented market, with British exporters, especially in agrifood and the creative sectors, encountering renewed obstacles.
Conclusion
In summary, the free movement of goods within the EU is the bedrock of the Union’s Internal Market and stands as a testament to years of legal innovation and political compromise. The Treaty provisions are robust, buttressed by wide-ranging case law and an increasingly harmonised regulatory environment, but the system is neither automatic nor perfect. The exceptions provided by Article 36 and the doctrine of ‘mandatory requirements’ illustrate the delicate tension between integration and legitimate national regulation. Harmonisation and mutual recognition are invaluable tools for keeping borders open in the absence of full political union.The story of the free movement of goods is not just one of legal technicalities, but of a continuous balancing act: between free trade and regulatory autonomy, between the interests of businesses and consumers, and between economic efficiency and social values. The law provides the tools, but its proper operation demands constant vigilance, adaptation, and a willingness both to cooperate and to compromise. The experience of the UK in the post-Brexit era powerfully underscores just how easily hard-won freedoms can be eroded, and serves as a poignant reminder: the benefits of the Internal Market, while deeply rooted, are never to be taken for granted.
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