Can a Member State during the coronavirus crisis prohibit a life science/healthcare company from delivering certain products (such as testing kits or protective medical gear) or medicines to other EU/EEA countries?

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Carmen Verdonck

Partner

Hanne Baeyens

Associate

So far during the coronavirus crisis, several countries such as France and the Czech Republic have already announced bans on exports of protective gear to avoid shortages in their countries. But is this action in conformity with the principle of free movement of goods as provided for in Articles 34-36 TFEU?

This principle is one of the cornerstones of the European Union's internal market and implies that national barriers on the free movement of goods within the EU (and also within the EEA) need to be removed.

However, the principle is not absolute and restrictions or even prohibitions are acceptable when serving important purposes such as the protection of the environment or human health and if they respect the principle of proportionality and necessity. In exceptional circumstances, the imposition of limited export bans may be justified for medicines and medical devices where there is a demonstrated supply shortage and consequent risk to patient safety. Such measures are lawful under EU law free movement principles provided that they: are in response to a genuine public health risk, are appropriate to achieve the public health objective, and are not more restrictive than is necessary to achieve their legitimate objective.

On the other hand, the question arises whether such export restrictions are still possible in the event of a global crisis such as the Covid 19 epidemic? After all, the shortage is not only at home, but also in many other EU countries and isn’t this contrary to the principle of solidarity between EU Member States?

Indeed, top European Union officials are urging members to put solidarity above national interests as the coronavirus spreads quickly across the continent.

Speaking on 6 March 2020 after an urgent meeting in Brussels of Health ministers from the 27-country bloc, Crisis Management Commissioner, Janez Lenarcic, said EU nations are entitled to restrict exports of medical equipment but warned that such decisions could compromise the EU's ability to manage the growing COVID-19 virus crisis. Public health experts are concerned that should more developed countries ban exports of masks and protective gear, poorer nations could be at risk of widening outbreaks, particularly among medical workers.

According to the Belgian Health minister, Maggie De Block, limiting exports of medical supplies is "not in the spirit of the EU".

The European Commission has emphasized in its Coordinated economic response to the COVID-19 Outbreak of 13 March 2020 that “It is crucial that national measures pursue the primary objective of health protection in a spirit of European solidarity and cooperation”. The Commission clearly disapproves the various national restrictions which have spread to an increasing range of products, starting with personal protective equipment and extending more recently to medicines. It states that “restrictions on exports ignore integrated supply chains. They create bottlenecks to production of essential supplies by locking inputs in specific Member States. They disrupt logistics and distribution chains, which rely on central warehouses. They encourage stockpiling responses in the supply chain. Ultimately, they reintroduce internal borders at a time where solidarity between Member States is the most needed”.

The Commission recalls that the TFEU “allows Member States under certain strict conditions to deviate from Single Market rules. Any national restrictive measure taken under Article 36 TFEU to protect health and life of humans must be justified, i.e. suitable, necessary and proportionate to such objectives by ensuring an adequate supply to the relevant persons while preventing any occurrence or aggravation of shortages of goods, considered as essential, such as personal protective equipment, medical devices or medicinal products. Any planned national measure restricting access to medical and protective equipment must be notified to the Commission, which is to inform the other Member States thereof. The measures so far notified to the Commission have been assessed with regard to ensuring that essential goods reach those who need them the most. The Commission is treating those cases as a matter of priority and supports Member States to correct any such measure. In case Member States do not sufficiently adapt their rules, the Commission will take legal action.”

Annex 2 to this response provides guidance for Member States on how to put in place adequate control mechanisms to ensure security of supply across Europe and can be found here. The Commission clarifies that “a simple export ban alone cannot meet the legal requirement of proportionality. Such a measure does not, in itself, ensure that the products will reach the persons who need them most. They would therefore prove unsuitable to reach the objective of protecting the health of people living in Europe”.

It emphasizes that “measures without a clearly identified scope restricted to actual needs, a solid rationale and/or a limited duration may increase the risk of scarcity and therefore are very likely to be disproportionate”.

The Commission adds that, on the other hand, “Measures regulating the concerned markets with adequate mechanisms to channel essential goods where they are needed the most both within the Member States and to qualified buyers in other Member States, can be a positive contribution to the overall coordinated European approach to help saving lives.

The same approach is reflected in the recently issued Guidance notice to Member States related to Commission Implementing Regulation EU n°2020/402 making the exportation of certain products subject to the production of an export authorisation, as amended by Commission Implementing Regulation (EU) n° 2020/426:

  • The Implementing Regulation was adopted with the understanding that Member States should revoke any restrictive national actions taken, formally or informally, concerning either exports to third countries or trade between the Member States within the Single Market, going beyond actions designed to ensure priority access to such material by those who need it most (e.g. hospitals, patients, healthcare workers, civil protection authorities)”.

It can be concluded from the above that export restrictions to other countries of the EEA during the period of COVID-19 will not be easy to justify in light of the principles of the free movement of goods and solidarity and can only be introduced in close cooperation with the European Commission.

 

Do not hesitate to contact Hanne Baeyens  or Carmen Verdonck for further information.

The above information is merely intended as comment on relevant issues of Belgian law and is not intended as legal advice. Before taking action or relying on the comments and the information given, please seek specific advice on the matters that are of concern to you.

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