European law report - Parallel imports on the net
The issue of parallel importation has arisen once more in a recent judgment delivered by the European Court of Justice (ECJ) in a case referred by the German Court. The complainant, Dynamic Medien, a company established in Germany, was in the businees...
The issue of parallel importation has arisen once more in a recent judgment delivered by the European Court of Justice (ECJ) in a case referred by the German Court. The complainant, Dynamic Medien, a company established in Germany, was in the businees of selling video and audio media. Avides Media, its competitor in the UK, sold video and audio media by mail order via its internet site.
The dispute arose regarding the importation by Avides Media of Japanese cartoons in DVD or video cassette format from the UK to Germany. These cartoons were rated as 15+ by the British Board of Film Classification in accordance with applicable UK rules relating to the protection of young persons in force in the UK.
Dynamic Medien attempted to stop the importation of the Avides cartoons, claiming that the German rules on the protection of young persons prohibit the sale by mail order of image storage media that had not been examined in Germany. The German Regional Court referred the matter to the ECJ for a ruling on whether the German law on the protection of young persons complied with the provision of Article 28 of the EU Treaty, which enshrines the principle of the free movement of goods.
The German government, taking the side of Dynamic Medien in the proceedings before the ECJ, submitted that the mail order sales of unexamined media was only allowed when they were purchased by an adult and delivery to children and adolescents prevented by effective means. On the other hand, the UK government argued that the German law constitutes a measure having equivalent effect to a quantititative restriction on imports prohibited by EU law.
At the outset, the ECJ determined that the German rules applied not only to suppliers established on the territory of Germany but also to suppliers established in other EU member states. It therefore applied to both national and imported products.
The Court declared that the general principle of freedom of movement of goods requires the removal of all national trading rules that are capable of hindering, directly or indirectly, trade between the member states. Thus, obstacles to the free movement of goods, including rules that lay down requirements to be met by goods coming from a different EU member state, such as rules relating designation, form, size, weight, composition, presentation, labelling or packaging constitute measures of equivalent effect, even if those rules apply to all products alike. The need to adapt the products to the rules in force in the member state in which they are marketed is such as to hinder trade between member states.
Yet, this general principle is subject to one exception: a public interest objective that overrules the requirements of the free movement of goods.
The Court declared that German rules to make the importation of image storage media from a member state other than Germany more difficult and more expensive constitute a measure having equivalent effect to quantitative restrictions. However, the Court found that they were justified since they were designed to protect young people. The ECJ made reference to the international protection of the rights of children, such as the International Covenant on Civil and Political Rights and the Convention on the Rights of the Child. The ECJ, recognising that the protection of the child is a legitimate interest, declared the German rules legal and lawful in terms of EU law.
• Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.
The dispute arose regarding the importation by Avides Media of Japanese cartoons in DVD or video cassette format from the UK to Germany. These cartoons were rated as 15+ by the British Board of Film Classification in accordance with applicable UK rules relating to the protection of young persons in force in the UK.
Dynamic Medien attempted to stop the importation of the Avides cartoons, claiming that the German rules on the protection of young persons prohibit the sale by mail order of image storage media that had not been examined in Germany. The German Regional Court referred the matter to the ECJ for a ruling on whether the German law on the protection of young persons complied with the provision of Article 28 of the EU Treaty, which enshrines the principle of the free movement of goods.
The German government, taking the side of Dynamic Medien in the proceedings before the ECJ, submitted that the mail order sales of unexamined media was only allowed when they were purchased by an adult and delivery to children and adolescents prevented by effective means. On the other hand, the UK government argued that the German law constitutes a measure having equivalent effect to a quantititative restriction on imports prohibited by EU law.
At the outset, the ECJ determined that the German rules applied not only to suppliers established on the territory of Germany but also to suppliers established in other EU member states. It therefore applied to both national and imported products.
The Court declared that the general principle of freedom of movement of goods requires the removal of all national trading rules that are capable of hindering, directly or indirectly, trade between the member states. Thus, obstacles to the free movement of goods, including rules that lay down requirements to be met by goods coming from a different EU member state, such as rules relating designation, form, size, weight, composition, presentation, labelling or packaging constitute measures of equivalent effect, even if those rules apply to all products alike. The need to adapt the products to the rules in force in the member state in which they are marketed is such as to hinder trade between member states.
Yet, this general principle is subject to one exception: a public interest objective that overrules the requirements of the free movement of goods.
The Court declared that German rules to make the importation of image storage media from a member state other than Germany more difficult and more expensive constitute a measure having equivalent effect to quantitative restrictions. However, the Court found that they were justified since they were designed to protect young people. The ECJ made reference to the international protection of the rights of children, such as the International Covenant on Civil and Political Rights and the Convention on the Rights of the Child. The ECJ, recognising that the protection of the child is a legitimate interest, declared the German rules legal and lawful in terms of EU law.
• Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.