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Cross-border provision of services

Cross-border provision of services. Arts 56 to 62 TFEU The Services Directive 2006/123. Article 56 1st paragraph.

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Cross-border provision of services

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  1. Cross-border provision of services Arts 56 to 62 TFEU The Services Directive 2006/123 R.Greaves

  2. Article 56 1st paragraph Within the framework of the provisions set out below, restrictions on freedom to provide services within the EU shall be prohibited in respect of nationals of Member States who are established in a State of the EU other than that of the person for whom the services are intended. R.Greaves

  3. Article 56 2nd paragraph The Council may, acting by a qualified majority on a proposal from the Commission, extend the provisions of the Chapter to nationals of a third country who provide services and who are established within the EU. R.Greaves

  4. Direct effect of Article 56 • Van Binsbergen 33/74 • Cowan v Le Tresor 186/87 • Rush Portuguesa 113/98 R.Greaves

  5. Meaning of services-Article 57 TFEU Services shall be considered to be ’services’ within the meaning of this Treaty where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons. R.Greaves

  6. Examples "Services" shall in particular include: • (a)  activities of an industrial character; • (b)  activities of a commercial character; • (c)  activities of craftsmen; • (d)  activities of the professions. R.Greaves

  7. Relevant case law • Schindler C-275/92 • SPUC v Grogan C-159/90 R.Greaves

  8. Matters decided by CJEU • Remuneration need not come from the recipient • Service provided must have a profit motive • Medical services • Education services • Financial services R.Greaves

  9. Article 57 3rd paragraph Without prejudice to the provisions of the chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the State where the service is provided, under the same conditions as are imposed by that State on its own nationals. R.Greaves

  10. What rights are conferred on service providers/receivers? • Gourmet C-405/98 • Carpenter C-60/00 • Luisi & Carbonne 286/82

  11. Sufficient that service itself moves/does not come from recipient/profit motive • Alpine Investments C-384/93 • Bond van Adverteeders 352/85 • Belgium State v Humbel 263/86

  12. Exclusions & reservations – Article 58 • Transport services - excluded • Banking services – free movement of capital R.Greaves

  13. Article 61 TFEU MS obligation As long as restrictions on freedom to provide services have not been abolished, each Member State shall apply such restrictions without distinction on grounds of nationality or residence to all persons providing services within the meaning of the first paragraph of Article 56 TFEU. R.Greaves

  14. The Gerbhard Conditions • non-discriminatory manner in which applied • Justified by imperative requirements in general • suitability for securing attainment of objectives • not go beyond what is necessary R.Greaves

  15. Article 62 TFEU The provisions of Articles 51 to 54 TFEU shall apply to the matters covered by this chapter. R.Greaves

  16. Article 59 TFEU – legislative competence   In order to achieve the liberalisation of a specific service, the Council shall, on a proposal from the Commission and after consulting the Economic and Social Committee and the European Parliament, issue directives acting by a qualified majority. R.Greaves

  17. Secondary legislation and actions • Services Directive 2006/123(45% of GDP?) • Directive 2004/38 on Citizens Rights (CRD) • 2012 Services Package • Directive 96/71 on Posting of Workers [& Directive 2014/67 (the so-called 'Enforcement Directive’)] • Directive 2005/36 on recognition of professional qualifications R.Greaves

  18. The Services Directive 2006/123 • Art 1(2) excludes SGEIs; Art 1(6) excludes labour law • Arts 4(2) & (3): excludes third country nationals as providers but not as recipients • Art 2 (2) Exclusions: non-economic SGIs; financial services; transport; electronic communication services & networks; services of temporary work agencies; private security; official authority connected services; notaries & bailiffs; gambling; health care services (including pharmaceutical services); audio-visual; certain social services set out in Art 292)(j) • Art 2(3): taxation

  19. Principles • MSs to justify obstacles on grounds: non-discrimination; necessary; proportional • Cooperation between MSs: mutual assistance in supervision of service providers; ensure effective supervision & guarantees that supervision not lead to additional & unjustified obstacles to service providers R.Greaves

  20. Principles cont’ed • Exchange of information; carry out checks; inspections & investigations R.Greaves

  21. MSs have to • Remove obstacles (eg authorisations) • Abolish discriminatory regulations based on recipient’s nationality or place of residence • Make available general information, in particular consumer protection rules and or redress procedures applicable in other EU countries R.Greaves

  22. Country of origin principle • Art 16….. Principle replaced by ‘freedom to provide services’ MSs shall respect the right of providers to provide services in a MS other than that in which they are established The MS in which the service is provided shall ensure free access to and free exercise of a service activity within its territory

  23. Governing principles • Non-discrimination • Necessity • proportionality

  24. Exceptions to the freedoms • Art 45(3) TFEU + Art 52 +Art 62 TFEU • 2nd legislation • No limitations for economic reasons • Only invoked on basis of personal conduct • Public service proviso – Art 45(4) TFEU re workers R.Greaves

  25. Secondary legislation • Art 2(2)(i) of the CRD – Dr 2004/38 • Art 27(1): no limitations for economic ends • Art 27(2): only on the basis of personal conduct

  26. Relevant case law • Personal conduct: Van Duyn 41/74 • Criminal convictions: Bouchereoau 30/77; Bonsignore 67/74 – Art 27(2) • Procedural rights when exceptions invoked - Art 31

  27. Re Public service proviso • Art 45(4) re workers • Narrow interpretation • ‘official authority’ – Reyners 2/74; Sotgiu 152/73 exception only re access to post; once in post no discrimination

  28. Governing principles – Art 16 MSs shall not make access to or exercise of a service activity in their territory subject to compliance with any requirements which do not respect the following principles: • Non-discrimination • Necessity • proportionality

  29. Relevant secondary legislation Directive 2004/38 (CRD) • Art 27(1): no limitations for economic ends • Art 27(2): only on the basis of personal conduct

  30. Article 27(1) CRD • Subject to the provisions of this Chapter, Member States may restrict the freedom of movement and residence of Union citizens and their family members, irrespective of nationality, on grounds of public policy, public security or public health. These grounds shall not be invoked to serve economic ends. R.Greaves

  31. Art 27(2) CDR • Measures taken on grounds of public policy or public security shall comply with the principle of proportionality and shall be based exclusively on the personal conduct of the individual concerned. Previous criminal convictions shall not in themselves constitute grounds for taking such measures. The personal conduct of the individual concerned must represent a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society. Justifications that are isolated from the particulars of the case or that rely on considerations of general prevention shall not be accepted. R.Greaves

  32. What is the 2012 ‘services package’? • set of actions Commission proposed to stimulate growth in services sector • Communication + 3 Staff Working Documents • Report on Implementation of Services Directive • Results of performance check • Establishing guidance on application of Art 20(2) (non-discrimination principle) R.Greaves

  33. Implementation of the Services Directive • State of implementation • Remaining problems • Points of Single Contact • Individual MSs assessment • NB estimated economic impact at EU level is 0.8% in GDP over 10 year period • NB Setting out PSC has had a significant economic impact (0.23% GDP) R.Greaves

  34. Results of performance check • Shows how well different EU rules are applied to business on a day-to-day basis (NB carried out based on 3 scenarios in the construction, business services & tourism sectors) • Identifies obstacles for businesses wishing to expand to other MSs (NB lack of full compliance with other IM directives; heterogeneity of regulation of professional qualifications; lack of sufficient harmonisation of consumer protection rules) R.Greaves

  35. Points of Single Contact (Art 6) • designed to give up-to-date information on procedures need to be complied with when setting up a business or providing services on a cross-border basis • Procedures should be able to be completed online • Encouraged to provide multilingual information NB all MSs have set up their PSCs but degree of sophistication varies (most advanced are Denmark, Estonia, Spain , Luxembourg, Netherlands, Sweden & UK; problematic: Bulgaria, Greece, Ireland, Romania and Slovenia) R.Greaves

  36. State of implementation & remaining problems • all MSs have transposed (3 years originally) but evidence shows national laws still have requirements prohibited by the Directive. • ‘tacit approval procedure’ ie if authority not answer by a certain time, then authorisation deemed • Authorisation should be for the whole territory and not specific parts • MSs not ambitious: where discretion MSs chosen status quo eg restrictions on legal form and ownership in a number of professional services • Art 16: not always clear in sector-specific regulations which rules apply to incoming service providers R.Greaves

  37. Specific problems identified • rules discriminating on basis of nationality or residence • Obligations on service providers to carry out ‘economic need tests’ • Involvement of competing operators in decisions of competent authorities Rs.Greaves

  38. Guidance on Art 20(2) • No discrimination on basis of nationality or country of residence • Identify reasons behind such discrimination R.Greaves

  39. Examples of discrimination difficult to justify • Discrimination on grounds of nationality or residence when consumers move to another MS to receive services (eg theme parks and other tourist attractions which exclude from advantageous entrance fees; on-line recipients often redirected to websites offering higher prices; paying for use of motorways by foreign debit card ) R.Greaves

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