Abolition of Quantitative Restrictions

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Definition: Abolition of Quantitative Restrictions

Abolition of Quantitative Restrictions

Full Definition of Abolition of Quantitative Restrictions

One of the primary purposes of the original EEC was to encourage free trade between member states. the treaty of Rome provided three strategies by which this was to be accomplished:

  1. An abolition of duties on importation and exportation between member states (covered by what are now articles 23-25;
  2. a prohibition of discriminatory internal taxation that would encourage consumers to favour domestic production over imports (now articles 90-93)

and the subject of this article:

  1. abolition of all quantitative restrictions (`quotas’) on goods imported from other member states (articles 28-31), and measures having equivalent effect.

Note that importation duties will always be unlawful, but quotas and absolute prohibitions may be justifiable, as will be discussed.

Basic Principle: Distinctly Applicable Rules

Where the national authorities impose specific quotas on specific imports, they will be acting in contravention of Art. 28. So much is clear. What is less clear is what measures are of equivalent effect to a quota. In the landmark case of Procureur de Roi v Dassonville (1974) the ECJ took a very broad view of what constituted `equivalent effect’ to a quota:

All trading rules … which are capable of hindering, directly or indirectly, actually or potentially, intra-community trade…

Hence it was the effect of the trading rule that had to be considered, not its purpose. Anything that has the practical effect of restricting importation or exportation is liable to be struck down. This would include, for example, requirements to obtain export licences and over-complicated administrative requirements for importers.

However, it appears that not only do measures that restrict imports contravene Art. 28, but so too do coordinated campaigns to encourage consumption of domestic products (see The `Buy Irish’ case (1982)), even if they do not make use of specific legal measures.

In addition, fixing maximum or minimum prices for imported products, even while not restricting them numerically, will offend Art. 28, as will any measure that makes importation more costly or time-consuming than it ought to be.

Whether a national measure directly restricts importation or has the effect of doing so, all the examples discussed so far are of measures that are concerned with the country of origin. These measures, which have a country of origin as a distinct element, have become known as `distinctly applicable rules’. However, it should be clear than many national rules — most obviously those concerned with consumer protection — have the potential to affect importation even when not specifically concerned with the country of origin. These have become known as `indistinctly applicable rules’. We will have more to say about this later.

Justifying Quotas: Article 30

Art. 30 sets out a list of criteria which member states can use to justify imposing quotas or prohibitions on imports. These are as follows.

  1. Public morality
  2. Public policy
  3. Public security
  4. Protection of health and life of humans, animals, and plants
  5. Protection of national treasures
  6. Protection of industrial or commercial property

Art. 30 goes on to say that member states must not attempt to use these exceptions to Art. 23 to disguise protectionist restrictions on trade between member states.

The categories in Art. 30 are potentially very broad, but the ECJ has interpreted them restrictively. In particular, if a member state seeks to implement a measure that falls under one of the Art. 30 exceptions, it must show that the measure will really have the effect to which it alludes. For example, in Conegate Ltd V Customs and Excise Commissioners (1986), the UK was unable to show that restricting imports on the basis of public morality really would have an impact on public morality, as the goods it sought to restrict were already lawfully on sale within the UK. The `public policy’ exception has the greatest potential to be interpreted expansively, and member states have frequently tried to bring their restrictions on importation within its scope. So far as I know, none have succeeded, and it remains unclear what grounds the ECJ would accept, if any, as falling within the scope of `public policy’.

Indistinctly Applicable Rules

The starting point for a discussion of indistinctly applicable rules has to be the notorious Cassis case (see Cassis de Dijon case (1979)). In this case, a rule preventing the sale in Germany of liqueurs with alcohol content less than 25% was held to infringe Art. 28. This was so even though the rule had no regard for the country of origin at all, and would have applied equally to domestic products.

This is an extremely important decision, because, in principle, almost any rule on the sale of goods can potentially restrict importation. A great many cases followed the decision in Cassis, and it was clear that it was going to be difficult to place appropriate boundaries on which trading rules would prima facie fall within the Cassis_ principle and therefore infringe Art. 28. In addition, it had to be accepted that some indistinctly applicable rules could be justified even though they appeared to fall within the Cassis criteria. There is some overlap between these two issues — whether a measure falls within the Cassis criteria, and whether it can nonetheless be justified — but we will consider them separately.

Limiting The Scope Of Cassis

The broad scope of Cassis was the source of a great deal of litigation, once traders realized that they could invoke it to challenge almost any law that sought to restrict their commercial freedom — restrictions on Sunday trading, restrictions on opening hours, and restrictions on which product metas particular businesses could sell were all fair game.

Initially, the ECJ sought to limit the impact of the Cassis ruling by emphasising that some national rules which appeared prima facie to be within the scope of Art. 28 could nonetheless be justified on policy grounds (see below). However, it was inevitable that eventually, cases would start to be heard in which the rules could not easily be justified on policy grounds, but where the practical likelihood of discrimination against imports was a remote. The finding that such rules, when they restricted the freedom of traders to operate in particular ways, could be challenged under the Cassis principle was most unwelcome.

So in Criminal Proceedings against Keck and Mithouard (1993), the ECJ tried to clarify and reduce the scope of Cassis. The court distinguished between `market access rules’, which would infringe Art. 28 if they discriminated against imports, directly or indirectly, and `selling arrangement’, which would not. To constitute a `market access rule’, a measure would have to be one which restricted or prevented the availability of a particular imported product in a particular market. Any rule which had the effect of a general reduction in sales of all products would no longer contravene Art. 28.

It is probably fair to say that the reaction to Keck was mostly unfavourable, for two reasons. First, although it was an irritation that Cassis could be used by traders to resist restrictions in the selling practices, Cassis was generally felt to be necessary for the absence of laws harmonizing trading standards across the Community. Second, the distinction between `market access rules’ and `selling arrangements’ is itself not all that clear. There are some indications that the ECJ is now moving towards a test for discrimination against imports based on the scale of the practical effect on the importation, rather than a strict distinction between selling arrangements and market access rules; but this is by no means certain at present.

Justifying Indistinctly Applicable Rules: `mandatory requirements’

Initial attempts to limit the scope of Cassis focused on whether the measure could be justified under one of the `mandatory requirements’ described in the Cassis case itself. These mandatory requirements are certain legitimate policy objectives which member states can use to put their trading rules outside the scope of Art. 28. These include the following.

  • Rules which seek to restrict unfair commercial practices (such as selling goods which are poor-quality imitations of familiar products) * Rules which seek to protect public health (in which case there might also be an exception under Art. 30) * Consumer protection

In practice, very few attempts to justify discriminatory trading rules on the basis of consumer protection have succeeded. The ECJ has developed the PrincipleOfMutualRecognition, which states that products which are lawfully on sale in one member state must be accepted as safe to sell in another. The practical effect of this policy is that, without constant intervention by the EU in the form of consumer protection legislation, standards would sink to the lowest level prevalent in the member states, but that is a discussion beyond the scope of this article.

It is clear that the list of mandatory requirements in Cassis is not exhaustive, and a measure which pursues a goal which is in accord with general EU principles, and which is proportionate, may well escape Art. 28. This `policy and proportionality’ approach is typified by the `Sunday Trading’ cases, notably Torfaen BC v B&Q (C-145/88). Restriction of Sunday trading had the potential to discriminate against importation, simply because it reduced the total volume of all products sold. However, in these cases the ECJ held that the member states were pursuing legitimate policy objectives, using measures which were proportionate to the desired outcome, so the measures, therefore, did not infringe Art. 28. Similar reasoning can be seen in the Cinéthèque (c-60/84) case, in which France sought to restrict the sale of video recordings to encourage cinema attendance (and thereby support the film industry).

It is now also clear that environmental protection can be included in the list of mandatory requirements.

The Relationship Between`Mandatory Requirements’ And Art. 30

It must be emphasized that the `mandatory requirements’ form a list of potential derogations from Art. 28 that is much broader than the list in Art. 30, and that it, therefore, applies to indistinctly applicable rules only. A measure which imposes a direct quota on imports can only be justified under the much smaller list in Art. 30. It is clear why this should be so — the number of trading rules that have the potential indirectly to discriminate against imports is vast, so the number of grounds on which exclude those rules from the scope of Art. 28 must be corresponding large, else the courtrooms will be full and trade at a standstill.

However, while it is relatively clear why the number of mandatory requirements must be substantial, it is less clear why the number of exceptions in Art. 30 must be so small. In particular, it is not clear why consumer protection and environmental protection are legitimate grounds on which to defend a measure which discriminates indirectly against imports, but not one which discriminates directly. The question, therefore, arises whether the list in Art. 30 is exhaustive. In theThe Walloon waste case (1992), the ECJ accepted the argument of the Belgian government that a measure preventing the importation of waste for dumping could be justified on environmental grounds. However, this does not necessarily mean that the ECJ recognized an additional exception to Art. 28 that those in Art. 30. In fact, the ECJ based its decision on the fact that waste is not an `import’ as such, and cannot, therefore, be the subject of a restriction on imports.

In short, it appears that whatever arguments there might be for increasing the number of exceptions to Art. 28 inline with exceptions recognized for indistinctly applicable measures, the ECJ has not yet been prepared to do so. However, Wallon waste shows that it might be prepared to achieve the same effect by a different route in deserving cases.


Arts. 28 and 29 prevent the direct imposition of quotas and prohibitions on imports and exports. Following Dassonville, Art. 28 applies to any trading rule phrased in terms of country of origin, whatever its form, if it has the potential to act as a barrier to trade between member states.

If a rule is not phrased in terms of country of origin, it may nonetheless constitute an `indistinctly applicable rule’ and contravene Art. 28 if it has the practical effect of restricting importation. Because the number of indistinctly applicable rules is potentially so large, the application of Art. 28 to these rules is limited in two ways. First, the decision in Keck prevents Art. 28 applying to `selling arrangements’, that affect sale volumes of all products equally. Second, Art. 28 will not apply to rules that pursue legitimate policy objectives and are proportionate. The number of exceptions allowed to Art. 28 for indistinctly applicable rules is very much larger than those allowed for distinctly applicable rules, and this area of law would be much simpler if there was some unification of these sets of exceptions.

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Definition Sources

Definitions for Abolition of Quantitative Restrictions are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th April, 2020 | 0 Views.