This advice will consider the legality of the various national measures encountered by Tosta Ltd when exporting its toasters to Germany, Italy, France, and Sweden. The analysis will be based on the rules governing the free movement of goods within the European Union, a fundamental principle of the single market. The key provisions are found in the Treaty on the Functioning of the European Union (TFEU), specifically Articles 30 and 34. Each measure will be assessed in turn to advise Tosta Ltd on its rights under EU law.
(a) Germany: The €4 Levy
The first issue concerns the €4 levy charged by Germany on all imported toasters. The legality of this measure depends on whether it constitutes a customs duty or a Charge Having an Equivalent Effect (CEE), both of which are prohibited under Article 30 TFEU. Article 30 states that “Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States.”
The Court of Justice of the European Union (CJEU) provided a wide definition of a CEE in the *Statistical Levy* case (*Commission v Italy* (Case 24/68)). A CEE is any financial charge, however small or designated, which is imposed on goods because they cross a frontier, and which is not a customs duty in the strict sense. The purpose of the charge is irrelevant (*Commission v Italy (Art Treasures)* (Case 7/68)).
In Tosta Ltd’s situation, Germany imposes a €4 charge per item on toasters imported into the country. This is a pecuniary charge imposed solely because the goods are crossing the border. The stated purpose of the levy, which is to fund research and development for environmentally friendly appliances, does not prevent it from being classified as a CEE. The crucial factor is that it is triggered by the act of importation.
There are very limited exceptions to the prohibition in Article 30. A charge is not a CEE if it constitutes payment for a specific service rendered to the importer (*Statistical Levy*), or if it falls within the scope of internal taxation under Article 110 TFEU. The German levy does not appear to be for a service provided to Tosta Ltd. It could also only be considered internal taxation if it applied systematically to both domestic and imported toasters alike. The facts state the levy is “for all toasters imported into Germany,” which suggests it does not apply to domestically produced toasters. Therefore, it is discriminatory and cannot be justified as a form of internal taxation under Article 110. It is a classic CEE.
In conclusion, the €4 levy imposed by Germany is a Charge Having an Equivalent Effect to a customs duty and is therefore in breach of Article 30 TFEU. The measure is unlawful, and Tosta Ltd should not have to pay it.
(b) Italy: Restriction on Sales Outlets
The second issue is the Italian regulation stipulating that toasters may only be sold in electrical retail shops and not in supermarkets. This is a non-fiscal barrier, and its legality must be assessed under Article 34 TFEU, which prohibits “quantitative restrictions on imports and all measures having equivalent effect.”
The CJEU defined a Measure Having an Equivalent Effect to a Quantitative Restriction (MEQR) in *Procureur du Roi v Dassonville* (Case 8/74) as “all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade.” While this is a broad definition, the case law has been refined. In *Keck and Mithouard* (Cases C-267 and C-268/91), the Court distinguished between rules relating to product requirements (which are MEQRs) and “certain selling arrangements”. A selling arrangement, which is a rule concerning how, where, or when goods may be sold, will fall outside the scope of Article 34 provided two conditions are met: (1) the rule applies to all traders operating within the national territory (it is not discriminatory in law), and (2) it affects both domestic and imported products in the same manner, in law and in fact.
The Italian rule restricts the location where toasters can be sold. This is a classic example of a selling arrangement. It applies to all toasters, whether produced in Italy or imported, so it is not discriminatory in law. The key question is whether it affects domestic and imported products in the same way in fact. A potential argument for Tosta Ltd is that this rule has a greater negative impact on their products. As a new entrant to the Italian market, supermarket distribution might be the most effective or even the only viable way for Tosta to gain a foothold and reach a wide consumer base. Being denied this channel while local, established brands may have long-standing relationships with specialist retail shops could mean that the rule, while seemingly neutral, disproportionately hinders Tosta’s market access. The CJEU has acknowledged this possibility in cases like *De Agostini* (Cases C-34/95 to C-36/95), where a ban on advertising was seen as potentially disadvantaging imported goods more.
However, a strict application of the *Keck* test would likely lead to the conclusion that this is a lawful selling arrangement. If Italian manufacturers are also prevented from selling in supermarkets, the rule affects all parties equally. Courts are often reluctant to find such rules unlawful unless there is clear evidence that market access for the importer is seriously impeded.
Therefore, while Tosta Ltd could argue that the measure hinders its market access more than that of its domestic competitors, it is more likely that the Italian regulation would be considered a lawful selling arrangement falling outside the scope of Article 34 TFEU.
(c) France: Annual Import Limit
France’s policy of placing an annual limit on the number of toasters that can be imported is a direct restriction on the quantity of goods entering the country. This measure must be assessed under Article 34 TFEU’s prohibition of “quantitative restrictions on imports”.
A quantitative restriction (QR) is defined as a measure that amounts to a “total or partial restraint of imports” (*Geddo v Ente Nazionale Risi* (Case 2/73)). A quota, which sets a numerical limit on imports, is the clearest example of a QR. The French measure is an explicit quota and therefore falls squarely within the prohibition of Article 34 TFEU.
Unlike MEQRs, which can sometimes be justified by ‘mandatory requirements’ (judge-made justifications like consumer protection), QRs can only be justified on the specific grounds listed in Article 36 TFEU. These grounds include public morality, public policy, public security, and the protection of health and life of humans, animals or plants. France’s stated concern is the “impact of the disposal of electric appliances on the environment.” This could be argued to fall under the ‘protection of health and life of humans, animals or plants’.
Even if the objective (environmental protection) is legitimate under Article 36, the measure must also be proportionate. This means it must be necessary and appropriate to achieve the objective, and it must not be a means of arbitrary discrimination or a disguised restriction on trade. The French quota is unlikely to pass this test. Firstly, it is discriminatory as it applies only to imported toasters, leaving French domestic production unrestricted. This suggests its true purpose may be to protect the domestic market. Secondly, the measure is not proportionate. A less restrictive means of achieving the environmental goal would be to implement a non-discriminatory recycling programme or a disposal levy applicable to all toasters sold in France, regardless of their origin. A blanket ban on imports once a certain number is reached is a very blunt instrument that is highly restrictive of trade.
Because the measure is discriminatory and disproportionate, it cannot be justified under Article 36. The annual limit on imported toasters is a clear QR and a breach of Article 34 TFEU.
(d) Sweden: The Four-Slice Toaster Requirement
The final issue is the Swedish law requiring all products marketed as a “toaster” to be capable of toasting four slices of bread simultaneously. Tosta’s products toast two slices. This measure relates to the characteristics of the product itself and must be assessed as a potential MEQR under Article 34 TFEU.
This is an example of a product requirement. The rule would force Tosta Ltd to either modify its product to meet Swedish standards or not sell it as a “toaster” in Sweden. This creates a barrier to trade and therefore falls within the *Dassonville* definition of an MEQR. As the rule applies to all toasters sold in Sweden, regardless of origin, it is an ‘indistinctly applicable’ MEQR.
Such measures can be lawful if they pass the test established in *Cassis de Dijon* (Case 120/78). This test requires that the measure must be necessary to satisfy a “mandatory requirement” (an overriding reason in the public interest, such as consumer protection or environmental protection) and must be proportionate. The principle of mutual recognition, also from *Cassis*, states that a product lawfully produced and marketed in one Member State (Ireland) should be accepted in others.
The most likely mandatory requirement Sweden would claim to be pursuing is consumer protection, to prevent consumers from being confused or misled. However, the proportionality of the measure is highly questionable. Requiring a two-slice toaster to be completely redesigned to toast four slices is a significant barrier to trade. A much less restrictive alternative would be to require clear labelling. For example, Sweden could require Tosta’s product to be marketed as a “Two-Slice Toaster”. This would provide consumers with the necessary information to make an informed choice without barring the product from the market. In *Rau v De Smedt* (Case 261/81), the CJEU found that a requirement for margarine to be sold in a specific shape was disproportionate, as consumer protection could be achieved through labelling. The same logic applies here.
The Swedish law is an indistinctly applicable MEQR. While it pursues a legitimate objective, it is a disproportionate measure. Therefore, it is contrary to Article 34 TFEU and is unlawful.
References
Cases
- Commission v France (Reprographic Machinery) (Case 90/79) ECLI:EU:C:1981:68
- Commission v Italy (Art Treasures) (Case 7/68) ECLI:EU:C:1968:51
- Commission v Italy (Statistical Levy) (Case 24/68) ECLI:EU:C:1969:29
- Geddo v Ente Nazionale Risi (Case 2/73) ECLI:EU:C:1973:89
- Keck and Mithouard (Joined Cases C-267/91 and C-268/91) ECLI:EU:C:1993:905
- Procureur du Roi v Dassonville (Case 8/74) ECLI:EU:C:1974:82
- Rau v De Smedt (Case 261/81) ECLI:EU:C:1982:352
- Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (‘Cassis de Dijon’) (Case 120/78) ECLI:EU:C:1979:42
- Svenska Domstolsverket v De Agostini (Svenska) Förlag AB (Joined Cases C-34/95, C-35/95 and C-36/95) ECLI:EU:C:1997:344
Legislation
- Consolidated Version of the Treaty on the Functioning of the European Union [2012] OJ C326/47
