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Cassis Spirit Trading

          CASE NUMBER:        220  
          CASE MNEMONIC:      CASSIS
          CASE NAME:          Cassis Spirit Trading in the EC


1.        The Issue

     In the "Cassis de Dijon" case, the European Court of Justice
struck down a German import prohibition.  The prohibition
disallowed the import, sale and/or marketing of liqueurs in
Germany that didn't meet minimum German alcohol standards.  The
ruling gave the European Commission an opportunity to develop the
principle of "mutual recognition."  Ultimately, the principle
implies that any national law with reasonable policy goals, such
as environmental conservation, health, and so on, will be
tolerated within the regional trading block of Europe.

2.        Description

     In February 1979, the European Court of Justice struck down
a German prohibition on imports from other European Union (EU)
countries.  The prohibition banned the importation of alcoholic
beverages that did not meet minimum alcohol content requirements. 
The case involved Cassis de Dijon, a French liqueur manufactured
from black currants.  Cassis contains 15%-20% alcohol and the
German standards prescribed 25%.  Rowe-Zentral AG, a German
import/export firm, brought suit charging that the German
regulation on minimum alcohol contents was an illegal non-tariff

     The German government argued the validity of its regulation
primarily on health grounds, claiming that the law existed to
avoid the proliferation of alcoholic beverages within the German
market.  It argued that beverages with low alcoholic content
induce a tolerance toward alcoholism more so than highly
alcoholic beverages.  Germany also offered a consumer protection
justification claiming there was a need to protect consumers from
unfair producer and distributor practices (see ONTARIO case).  In
its final argument, the German government argued that the
elimination of the import ban would mean that one country could
set the standards for all member states, thus precipitating a
lowering of standards throughout the EU.

     After the case was brought against the German courts, the
European Court of Justice ruled that because Cassis met French
standards, it could not be kept out of the German market.
The European Court rejected the German health argument as
unconvincing and dismissed the its consumer protection
justification.  After rejecting the German defense claims, the
Court spelled out the general principle, which is now the most
famous part of the ruling: "There is therefore no valid reason
why, provided that they have been lawfully produced and marketed
in one of the Member States, alcoholic beverages should not be
introduced into any other Member State."   

     The Court ruled that barriers to trade were allowed only to
satisfy mandatory requirements relating to the effectiveness of
fiscal supervision, the protection of public health, the fairness
of commercial transactions and the defense of the consumer.  
When these conditions are threatened and import prohibitions are
found to be valid, the EU's Commission would provide minimum
standards in the form of a directive.  Member states would then
be obliged to harmonize their standards to meet the criteria set
out in Commission directives.

     There were cases before Cassis which formed new ideas about
the integration of standards.  The German law had previously been
challenged in 1974 in the Dassonville case.  It established the
legal basis for challenging the validity of domestic standards
that create nontariff barriers.  The Dassonville case was
identical to Cassis, only the liquor in question was French
Anisette.  The case was dropped after the German government made
an exception for Anisette and allowed it to be imported.  But it
was the Cassis ruling that was exploited by the Commission in its
attempt to foster free trade throughout the EU.  

     Cassis gained notoriety when a political debate was
instigated by the Commission.  The Commission extracted the
aspects of the ruling that were useful for eliminating nontariff
trade barriers.  In the Fall of 1979 Etienne Davignon, the
internal market commissioner, suggested in front of the EU
Parliament that trade policy should take a new direction based on
the Cassis ruling.  

     The Commission's new approach towards liberal trade was to
effect the way the member states would harmonize their divergent
environmental standards.  The principle of 'mutual recognition',
as set out in the Cassis case, was to replace the policy of
'absolute harmonization.'  Mutual recognition allowed the
Commission to issue directives in order to assure a high minimum
standard in areas such as environmental protection.   

     A year and a half after the ruling, the European Commission
spelled out the implications for free movement of goods within
the EU.  The Official Journal of the European Communities states,
"Any product imported from another member state must in principle
be admitted...if it has been lawfully produced, that is, conforms
to rules and processes of manufacture that are customarily and
traditionally accepted in the exporting country."

     The actual task of defining the standards was established by
the 1985 Single European Act.  European standards bodies,
including the European Committee for Standardization (CEN), were
created to uphold the level of standards to ensure that the
manufacturing process complied with the requirements set out by
Commission directives.  If a product is not manufactured in
accordance with the European standard then the onus is on the
producer to prove that the fundamental safety and health
requirements are met.  This had an immense impact upon the
development of environmental policy coordination within the EU.

     Although not mentioned in its founding treaty, environmental
policy is one of the Community's most highly regulated area of
competence.  There is a European consensus that believes, while
the environmental management is a national issue, it has obvious
international dimensions. Harmonization of national environmental
standards was necessary to avoid distortions within the single
market.  Before 1990, the Commission issued over 100 directive
measures relating to the coordination of environmental standards. 
A number of these were designed to combat water pollution and
exhaust emissions.  Moreover, Cassis has been used as a precedent
in determining the viability of national standards.  

     The mutual recognition principle, as defined through Cassis
de Dijon, is used as a basis for determining a countries right to
block goods from being imported on environmental grounds.  This
was made apparent in the Danish Bottle case which the Court ruled
on in 1988.  The Commission had argued that the Danes bottle
regulations, which required returnable containers for beer and
soft drinks together with licenses for new types of containers,
represented a trade barrier.  But the EU ruled in favor of the
Danes on the grounds of environmental protection (see DANISH

     The implications of the Cassis case are spread throughout
the development of the integration within the EU.  The evolution
of a cohesive environmental policy was put in motion after the
Commission cited this case as the method for reconciling
divergent standards.  The influence of the Cassis ruling on the
policy-making process has been apparent in prior environmental
rulings and continues to influence the coordination of
environmental policy today.

3.        Related Cases

     PISCO case

     Keyword Clusters

     (1): Trade Product            = SPIRIT
     (2): Bio-geography            = TEMPerate
     (3): Environmental Problem    = Regulatory Standard [REGSTD]

4.        Draft Author:  Timothy Conley

B.        Legal Clusters

5.        Discourse and Status:  AGReement and COMPlete

6.        Forum and Scope:   EURCOM and REGION

7.        Decision Breadth: 15 (EURCOM)

8.        Legal Standing:   Treaty

C.        GEOGRAPHIC Clusters

9.        Geographic Locations

     a.   Geographic Domain   :  EUROPE
     b.   Geographic Site     :  Western Europe  [WEUR]
     c.   Geographic Impact   :  Germany and France

10.       Sub-National Factors:  NO

11.       Type of Habitat:  TEMPERATE

D.        TRADE Clusters

12.       Type of Measure:   Import Ban [IMBAN]

13.       Direct vs. Indirect Impacts:   INDirect

14.       Relation of Measure to Environmental Impact

     a.   Directly Related    :  NO
     b.   Indirectly Related  :  YES  FOOD
     c.   Not Related:        :  NO
     d.   Process Related     :  NO

15.       Trade Product Identification: FOOD

     The principle of mutual recognition limited legislative 
harmonization by means of Article 100 of the Treaty of Rome to
the establishment of essential health and safety requirements
with which all products had to conform.  For example, technical
requirements are required for motor vehicles.  The Community now
harmonizes all technical regulations applying to motor vehicles
including forty-four directives covering the types of materials
go into the car as well as limits on exhaust emissions (see

16.       Economic Data

     The Commission's attempt to reduce non-tariff trade barriers
was largely successful because of the Cassis de Dijon case.  The 
mutual recognition principle opened the door to achieving a
genuinely single market.  Since the ratification of the SEA trade
has increased significantly in several sectors.

17.       Impact of Measure on Trade Competitiveness:  HIGH

18.       Industry Sector:    FOOD

19.       Exporter and Importer:   France and Germany

E.        ENVIRONMENT Clusters

20.       Environmental Problem Type:  HEALTH

21.       Name, Type, and Diversity of Species

     Name:          NA
     Type:          NA
     Diversity:     NA

22.       Resource Impact and Effect:   HIGH and REGULatory

23.       Urgency and Lifetime: NA and NA

24.       Substitutes:  LIKE

F.        OTHER Factors

25.       Culture:  YES

     It is important to recognize the level of integration that 
Europe has been largely achieved.  The member countries share
many facets of their culture with one another.  Where national
pride distinguishes the traditions of each country (such as wine
production), history has shown that they all have evolved with
relatively (on a global scale) common heritage.  The similarity
in interests and socio-economic development has contributed to
the integration process and the culmination of the Cassis de
Dijon case.

     EU politics also played a large role in the exposure and
implications of the Cassis case.  The success of the Commission's
"White Paper" which outlined the path to economic integration,
drew upon the aspects of the ruling that supported its cause. 
The Commission used the ruling to satisfy its own political
agenda of completing the internal market and furthering European

26.       Trans-Border:  YES

27.       Rights:   NO

28.       Relevant Literature

Alter, Karen J., and Meunier-Aitsahalia, "Judicial Politics in 
     the European Community."  Comparative Political Studies
     (January 1994): 535-559.
Dinan, Desmond.  An Ever Closer Union. (Boulder, CO: Lynne
     Rienner, 1994).
Harrison, Glennon J.  Europe and the United States. (Armonk,
     NY:  M.E. Sharpe 1994).
Nugent, N.  The Government and Politics of the European 
     Community. (London: Manmillan, 1989).
Pelkman, Jaques. "The New Approach to Technical Harmonization and
     Standardization," Journal of Common Market Studies 25, 3
     (March, 1987).
Rewe-Zentrale A.G. v. Bundesmonopolverwaltung fr Brantwein, 
     1979, 3 CMLR 494.
Swann, Dennis. The Single European Market and Beyond. (New York:
     Routledge, 1993).