Facts

In 1970, Gustave Dassonville, a wholesaler whose business was in France, and his son, Benoît, who managed a branch of the business in Belgium, imported Scotch whisky for sale in Belgium. The whisky was imported with the brand names ‘Johnny Walker’ and ‘Vat 69’, from Scotland to Belgium, via France, where Dassonville purchased it from French importers and distributors. Before the whisky was sold in Belgium, the Dassonvilles added labels to the bottles stating ‘British Customs Certificate of Origin’, with a handwritten note indicating certain details required by the French rules on designation of origin.

The Dassonvilles were prosecuted for forgery and violating Belgian law on protected designations of origin. Unlike French law, Royal Decree No. 57 (1934) required sellers of Scotch whisky in Belgium to obtain a certificate of authentication from the UK. At the time of the facts, prior to UK accession, the UK was outside the Customs Union. The Dassonvilles had imported the whisky as a parallel import and so had complied only with French law, which had no certification rules. Two companies that were the exclusive distributors for Johnny Walker and Vat 69 in Belgium also brought a civil claim for damages caused by the Dassonvilles’ alleged irregular imports.

The Dassonvilles claimed that Royal Decree No. 57 was incompatible with Art. 30 EEC (now Art. 34 TFEU), because it effectively prevented parallel imports—the import of goods from any other country other than the country of origin—where the country concerned has no rules regarding certificates of origin. They argued that this amounted to a sealing-off of the market—or, alternatively, discrimination or an unjustified disguised restriction on free trade.

The Tribunal de premiere instance of Brussels made a reference for preliminary ruling, asking, among other things, whether the national rule constituted a measure equivalent to a quantitative restriction (MEQR), also known as measures having equivalent effect, for the purposes of what is now Art. 34 TFEU.

Decision

The Court of Justice found that the Belgian measure did constitute an MEQR, in violation of Art. 34 TFEU. The Court defined the concept of an MEQR as ‘[a]ll trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade’ (at [5]).

The Court noted that, unlike direct importers, parallel importers could obtain a certificate of origin only with great difficulty. In the absence of a Community system to guarantee designations of origin for consumers, Member States could take ‘reasonable’ measures to prevent unfair practices, ensuring that proof required is ‘accessible to all Community nationals’ to avoid any hindrance to trade between Member States (at [6]), setting the origins of the ‘rule of reason’ doctrine (see further, Case 120/78 Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein‘Cassis de Dijon’ [1979] ECR 649; chapter 24). Although the Court did not need to address whether the Belgian rule was covered by Art. 36 EEC (now Art. 36 TFEU), it observed that such measures should not ‘constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States’ (at [7]).

Comment

The emphasis of this concept—as the term ‘measures having equivalent effect’ suggests—has always been on the effects of such measures, rather than on their purpose or content. Prior to Dassonville, academic debate was mixed as to whether this concept should cover only discriminatory measures or whether it would cover obstacles to trade more generally. Commission Directive 70/50/EEC of 22 December 1969 based on the provisions of Article 33(7), on the abolition of measures which have an effect equivalent to quantitative restrictions on imports and are not covered by other provisions adopted in pursuance of the EEC Treaty (OJ L 13/29, 19 January 1970), applicable during the Community’s transitional period, had identified 19 prohibited types of measure that could constitute an MEQR. In addition, the Directive integrated proportionality and confirmed that the discriminatory nature of a measure should not be decisive when assessing whether an MEQR violated the Treaty. This early guidance reflecting the Commission’s vision of a broadly construed Art. 34 TFEU was adopted and extended by the Court of Justice. In setting a broad definition of ‘measures having equivalent effect’ without discriminatory intent and without actual discrimination required between domestic and imported goods, Dassonville went beyond the Directive. Designed to capture a vast array of ‘actual and potential’ measures, the definition made a major impact on the reach of Art. 34 TFEU.

Wider Questions

The Dassonville formula has stood the test of time, referred to in almost all later cases on MEQRs, albeit with certain minor modifications. The term ‘trading rules’ has not always appeared in later cases referring to the Dassonville formula, although not in a way that undermines the definition. Over time, the Court of Justice began to adjust the focus of Art. 34 TFEU by limiting the reach of the Dassonville formula in certain areas. In Case 15/79 Groenveld [1979] ECR 3409, a case concerning Art. 29 EC (now Art. 35 TFEU), the Court notably diverged from Advocate General Capotorti’s view that Dassonville should also apply in this context and adopted an alternative, broad formula. A strand of case law also developed illustrating that certain measures can be regarded as too remote to be covered by Dassonville, because of their capacity to affect imports being too ‘uncertain and indirect’ (for examples after Joined cases C-267/91 and C-268/91 Keck and Mithouard [1993] ECR I-6097, see, for example, Case C-379/92 Peralta [1994] ECR I-3453 and Case C-44/98 BASF AG v Präsident des Deutschen Patentamts [1999] ECR I-6269). Finally, Keck-type selling arrangements have been found to fall beyond the scope of Art. 34 TFEU (see Keck, at [16]).