1 . 1 . THE F R E E D O M S O F C O M M U N I T Y LAW

1. Structure of the Freedoms

The EC Treaty formulates the four economic freedoms (goods, persons, services and

capital) as prohibitions.'' These prohibitions have been broadly interpreted by the

S e c t i o n Two. C o m m u n i t y L aw a n d C r o s s - B o r d e r I n s o l v e n c y R e g u l a t i on

Court. The leading case, decided in the context of the free movement of goods, is

Dassonvillc. In this case the Court held that

[a]ll trading rules enacted by the Member States which are capable of hindering,

either directly or indirectly, actually or potentially, intra-Community trade are to

be considered measures having an effect equivalent to quantitative restrictions.

Accordingly, the freedoms of Community law not only operate as prohibitions on

discrimination, as specifies of the general principle ot Community law contained in

Article 12 EC, but also as prohibitions on all obstacles to free movement arising from

measures that are applicable without distinction. From a perspective of market-integration

this broader operative scope ot the freedoms extending beyond discrimination

is necessary. A prohibition on discrimination, even when interpreted so as to include

discrimination in fact as well as in law, does not capture barriers to interstate trade

which arise as a consequence of disparities between national legal systems.1

The freedoms are, however, not absolute and do not preclude the regulation of, or

the intervention in, cross-border activity by the Member States. Community lawaccommodates

the regulatory concerns of Member States insofar as these concerns

have not led to (re-)regulation on the Community level. Crucially, however, the

remaining regulatory competencies of the Member States have been brought within

the Community objective of market-integration. Member States may only take measure

resulting in obstacles to free movement insofar as they are necessary tor and

proportionate to the protection of overriding public interests taking precedence over

the freedoms.

C h a p t e r L o u r . C o m m u n i t y Law a n d P r i v a t e I n t e r n a t i o n a l Law

The interests that may justify obstacles to trade can be divided into two groups. The

first group of interests, such as public order and the health and life of humans, animals

and plants, is expressly provided for in the Treaty and available in respect of nondiscriminatory

measures as well as those that are discriminatory." The lists of exceptions

contained in the Treaty are exhaustive and must be interpreted strictly." The

second group consists of those interests which have been recognised by the Court

under the 'rule of reason', established by the Court in the case of Cassis de Dijon.1' The

'rule of reason' is the corollary to the broad reading of the freedoms by the Court. In

contrast to the exceptions of Article 30 EC, the 'rule of reason' is in principle only

available for non-discriminatory or indistinctly applicable measures. On the other

hand, the list of 'mandatory requirements' is non-exhaustive and the Court has

recognised a wide variety o( interests which are capable of justifying measures resulting

in obstacles to trade, such as protection of the consumer and the environment.

Irrespective of whether a Member State relies on an interest expressly provided for

in the EC Treaty or on those recognised by the Court under the 'rule of reason', a

measure must be necessary and proportionate for the protection ot that interest. In

determining the necessity and proportionality, the Court will examine whether the

national measure is appropriate to realise the protection it is said to provide. Furthermore,

the national measure must be necessary: in particular there may not be available

alternatives which would be less restrictive of interstate trade. Moreover, by virtue ot

the principle of mutual recognition the necessity also depends on the level ot protection

the interest has received under the laws of the Member State of origin. A

measure by the Member State of import will not be deemed necessary, if protection

of the interest is sufficiently safeguarded by measures of the Member State ot export.

Under Community law Member States must mutually accept each other's laws and

regulations.1 ' Finally, the measure must be proportionate to the 'objective pursued

and/or the result actually achieved thereby'.