Free movement of services PDF

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EU Law – Free movement of services Free movement of services Article 56 TFEU Services = restrictions on freedoms to provide services within the union shall be prohibited in respect of nationals of member state who are established in a member state other than that of the person for whom the services are intended. The EU parliament and council may extend the provisions of the chapter to nationals of a third country who provides services who are established within the EU. Article 56 conditions = applies to both natural (must be a member state national) and legal persons. If only the seat of a company is established in the EU the activity must have ‘real and continuous link’ with the economy of a member state, other than the link of nationality. Article 57 definition of services = 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 government of goods, capital and persons. Services shall include: a) b) c) d)

Activities of an industrial character Activities of a commercial character Activities of craftsmen Activities of the professions

The person providing a service may in order to do so, temporarily pursue his activity in the state where the service is provided. Scope of Article 56: EU national established in state A goes to state B to provide a service and returns to state A. Article 56 can challenge rules laid down in both state A and state B that hinders the free movement of services. Article 56 had direct affect:  Van Binsbegergen= Mr K a Dutch national was working as a lawyer moving to Belgium during a court case where he was representing Van B. Dutch rule required legal representative’s to be established in the Netherlands. Mr K could therefore no longer provide the service as a legal representative to Mr Van B. Article 56 has horizontal direct effect:  Walrave & Koch= the prohibition of any discrimination based on nationality does not apply to the actions of public authorities but extends to rules of any other nature aimed at regulating in a collective manner gainful employment and the provision of services.

Confirmed in Wouters, Viking line and Laval. There MUST be an inter-state element (Deliege) Article 56 is applicable where: 1. Provider travels to provide service (Van Binsbergen, was not a wholly internal situation because of the legal representative having moved to Belgium, Art 56 only requires that the service provider must be established in another member state to that of the person receiving the service. The person providing that service may, in order to provide that service, may temporarily pursue his activity in the state where the service is provided, under the same conditions that are imposed by that state on its own nationals.) 2. Recipient travels to receive service (Luisi and Carbone, the freedom to provide services includes the recipients of services to go to another member state in order to receive a service there, without being obstructed by restrictions even in relations to payment and that tourists, persons receiving medical

treatment and persons travelling for education or business and to be regarded as recipients of services. Article 56 expressly refers to freedom to provide services. There are however limitations to this (Grogan)

3. Neither provider not recipient travels but the service is across borders (Alpine Investments, this was a Dutch company established in the Netherlands and the law prohibited Dutch companies from phoning individuals in the Netherlands or other member states and offering their services through cold calling. The CJEU held that this situation was covered by article 56.)  Bond van Adverteerders The service must be of a commercial nature and must be provided for remuneration (not necessarily monetary). There is a BROAD INTERPRETATION of the inter-state element:  Deliege = ‘ a degree of extraneity may derive in particular from the fact than an athlete participates in a competition in a member state othar than that which he is established.’ Services for remuneration: need for economic link which limits article 56.  Grogan = providing information about English clinics providing abortions and how to contact them in Ireland where it is illegal for an abortion. An anti-abortion clinic complained and it was argued by those giving out the information that they were assisting the free movement of services. It was held that the information is not being distributed on behalf of an economic operator established in another member state as there is no remuneration; therefore this was not a restriction of services within the meaning of Article 56. Types of restrictions caught by article 56 & 57: Direct discrimination, indirect, indistinctly applicable measures, dual burden  Gouda = article 56 entails in the first place, the abolition of any discrimination against a person providing services on account of his nationality or the fact that he is established in a member state other than the one in which the service is provided. (para 10) Indirectly discriminatory measures can be justified through public requirements but direct discrimination can only be justified through express delegations. Measures liable to prohibit or otherwise impede freedom to provide services:  Sager = article 56 requires not only elimination of all discrimination but also abolition of any restriction even if applies without distinction to national providers of service and to those of other member states, when it is liable to prohibit or otherwise impede the activities of a provider of services established in another member state where he lawfully provides similar services. Welfare state –service under article 56? Education:  Belgium v Humble = the link between service provider and recipient is so far from each other cannot be considered a service (paid very indirectly through taxes). This doesn’t fulfil the criteria of seeking to engage in gainful activity. -

Private schools CAN constitute as a service provider under article 56 and 57.

Healthcare:  Kohl/ Geraets-Smith/Peerbooms = medical treatment at issue in the main proceedings which was provided in member states other than those in which the persons concerned were insured, did lead to the establishments providing the treatment being paid directly by the patients. This should not cease to fall within the scope of the freedom to provide services guaranteed by the treaty merely because reimbursement of the costs of treatment involved is applied for under another member states sickness insurance legislation which is essentially the type which provides benefits of the kind. Medical treatment and healthcare IS covered under article 56 due to link between provider and recipient and remuneration, whereas education ISNT.  NHS: Watts = this individual went to another country for treatment after being told she didn’t need to as she was on NHS but this was taking too long and she went somewhere else anyway. It was said here that the relationship between the patient and sickness fund or the sickness fund and the healthcare provider is irrelevant.  Commission v Spain = Travelling for other reasons than medical treatment i.e. holiday, education and then needing unexpectedly medical care. Illegal activity- a service under article 56-57?  Grogan = the CJEU refused to assess the moral issues in relation to the Irish ban on abortion but they did say that if it was legal it would constitute a service within that member state. Derogations for establishment and services Article 52: -

Public policy Public health Public security

Article 65 makes article 52 applicable to services as well -

Public interest requirements = three conditions 1. The restriction must be adopted in pursuit of a legitimate public interest aim not incompatible with community aims 2. Restrictions must be equally applicable to nationals and non-nationals and all established within the state 3. The restrictions must be proportionate to the aim of the measure

Equivalent to mandatory requirements in Cassis, applies to indirectly and non-discriminatory measures.  Van Binsbergen = member states are permitted to have rules which regulate the administration of justice. In particular rules relating to organisation qualifications, professional ethics, supervision and liability. CJEU concludes = the rule (indirectly discriminatory) could be justified, however since the resident requirement was not related to any qualification or professional regulation, the rule was disproportionate.  Luisa and Carbone = because free movement of capital had not been fully achieved at the time of the case the member states are entitled to keep certain controls like a flat-rate restriction, on the movement of capital in so far as it does not affect the normal pattern of the provisions of services.  Alpine investment = prohibition of cold calling was a restriction on the freedom to provide services but it can be justified. Although protection of consumers in other member states are now a matter for the Netherlands authorities, the nature and extent of protections does none the less have direct effect on the good reputation of Netherlands financial services. It was concluded that the prohibition of cold calling by the

member state from which the telephone call is made, with a view to protecting investor confidence in the financial markets of that state, cannot be considered to be inappropriate to achieve the objective of securing the integrity of those markets.

Abuse of rights?  C-212/97 Centros = the avoidance of rules is held not to be an abuse, Denmark is not entitled to mitigate against it.  Van Binsbergen = had Mr K moved to avoid Dutch regulations then abuse can be established and authorities could mitigate against it. The purpose of rules being avoided and relationships of them to treaty provisions, the CJEU looks at whether intention of provisions are being abused. Recapping establishment and services: -

Provisions have direct effect (vertical and horizontal) Non-discriminatory measures are caught

Establishment = permanent Services = temporary Freedoms in General -

How far will the CJEU go to protect people?  Carpenter = if Mrs C would have to leave the country so would her husband to be with his family, her deportation would this affect him from carrying out on his activity. The UK and commission argued this was a wholly internal situation’s as Mr C had not exercised his right to move. The court held that he could not provide his services without his wife and this would be an obstacle for his freedom of services. There is also the protection of human rights and the right to respect family life under ECHR Article 8. The CJEU concluded the deportation was unnecessary for the aim pursued (for her to live legally in the UK). Note: Compare with the case of Singh.

National measure (by public or private body) Refusal of entry/ departure/ expulsion and residence

Direct discrimination Breach of Art 49

Breach of Art 49

Breach of Art 49

Unless justified by express derogations + fundamental human rights + proportionality

Measures that restrict, hinder or are an obstacle to market access (incl. indirect discrimination measures)

Unless justified by express derogations + fundamental human rights + proportionality

Unless justified by public interest requirements OR express derogations + fundamental human rights + proportionality

If no restriction?

Outside Art. 49

Regardless of the treaty article you fall under they have the same structure and the result would be the same for article 45, 49 and 56....