Chapter 6 Flashcards
What Articles?
Article 56 - 62
why is it different to freedom of establishment?
temporal character
Article 56
‘Within the framework of the provisions set out below, restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended.’
Also self employed
Jany
Does it apply to companies?
Yes
Article 62 applying Article 52
Does Article 56 have Direct Effect
Initially,
no as conditional and doesn’t satisfy VGEL
Van Binsbergen
- has DE
- Restrictions on the freedom to provide services should have been abolished by the end of the transitional period and so the requirement had become unconditional since that date
What are services?
- activities of an industrial character
- activities of a commercial character
- activities of craftsmen
- activities of the professions
NOT EXHAUSTIVE
Unborn children - abortion
Jany - prostitution
What constitutes a service?
Remuneration
Genuine and effective economic activity
Remuneration
Deliege
- Judo champion
- sponsors/broadcasters etc
Genuine + Effective
Steymann
- not marginal or ancillary
Schindler
- lotteries
Remuneration
Article 57 Services ‘ those normally provided for remuneration’ By person receiving service + Third parties
Deliege
Judo champion
rules of the European Judo Union which required athletes to be authorised or selected by their national federation in order to be able to compete in an international competition and which laid down national quotas for such competitions
Restricted her ability to provide services contrary to Article 56
COJ - rejected the argument that Article 56 could not apply because she was an amateur
The remuneration could be paid by a third party instead eg TV broadcasters, sponsers etc
Genuine and effective economic activity
Steymann
Not marginal or ancillary
Schindler
Lotteries are an economic activity - services provided for remuneration constituted by the price of the ticket
What is outside of Article 56?
Official Services
From Article 51
Same as Establishment
- Commission v Greece
- Commission v Italy
- Commission v Italy
When provisions for other areas such as Goods, Capital or Persons govern
- Article 57(1) TFEU provides that Article 56 will only apply in so far as the services are not governed by the provisions relating to freedom of movement for goods, capital and persons.
Only when the other freedom is entirely SECONDARY
Omega
- ‘lasersport’ games in which players attempted to shoot each other with infra-red laser guns was held to be governed by Article 56 TFEU effect of restricting imports of the equipment used in the game and therefore restricted the free movement of goods.
Gebhard
- mutually exclusive
Purely Internal Situations - Debauve Deliege - cross border Coster Hubbard - The provider and the recipient can be based in the same Member State as long as there is still some cross-border element to the service.
What about Official Services?
Excluded
From Article 51
Same as Establishment
- Commission v Greece
- Commission v Italy
- Commission v Italy
What about provisions for other areas such as Goods, Capital or Persons?
- Article 57(1) TFEU - Article 56 will only apply when the services are not governed by the provisions
Omega
- ‘lasersport’ games held to be governed by Article 56 TFEU even tho could have been goods
Gebhard
- mutually exclusive
- services are subordinate
What about Purely Internal Situations?
- Debauve
- doesn’t apply to purely internal situs
Deliege -
flexible when cross border element
Coster
- a local tax on ownership of satellite dishes breached Article 56 because it would dissuade people from buying dishes and thus receiving programmes broadcast in other Member States.
Hubbard - both provider + recipient in UK. Still discriminatory
What happened in Hubbard
In his capacity as a solicitor and executor of a will in the UK, Hubbard brought an action in the German courts which would transfer ownership of land in the testator’s estate in Germany to him.
Both the provider of the service (Hubbard) and the recipient of the services (Hubbard’s client) were based in the UK.
Non-German nationals who brought claims in the German courts had to provide security for costs which would cover the defendant’s legal costs in the event of an unsuccessful claim.
Hubbard claimed that this was in breach of Articles 18 and 56 TFEU Treaty. The Court of Justice agreed.
The German law was discriminatory on grounds of nationality.
What constitutes a restriction?
Direct discrim
Indirect
Non attractiveness
Van Binsbergen
Dutch lawyer. Said only ppl in Netherlands could be legal reps. Discrimination. Residence as well as nationality.
Koestler
Reluctance to extend in non-discrim measures
- french bank stock transactions
Said it was only direct + indirect. No discrim.
Commission v Germany (Insurance Services)
Even non discrim measures - if they act as a restriction of freedom.
Sager
- UK/German patents
Prohibitions extended to indistinctly applicable measures
Analir
Measures which render less attractive those activities
Unborn children
- Not a restriction. No link.
What about non-discriminatory measures?
Koestler
Initial reluctance
said only disc + indirect disc
Commission v Germany (Insurance Services)
-non-discriminatory measures may still be prohibited if they acted as restrictions on the freedom of the foreign national to provide services.
Sager
- UK/German patents
Prohibitions extended to indistinctly applicable measures
Analir
- Measures which render less attractive those activities
How can you justify a restriction
- Derogations in Article 52 applies
- public policy
- public security
- public health
Omega
- public policy derogation worked
- Imperative Reasons
Imperative Reasons:
Sager
national measures could only restrict the freedom to provide services if they satisfy the following conditions:
» They apply to all persons
» They are justified by imperative reasons in the general interest;
» They are objectively necessary
» They do not exceed what is necessary to attain these objectives.
van Binsbergen
Commission v Germany (Insurance services)
- MS justifying a national rule which restricted freedom to provide services
Schindler
- lottery - fraud
Deliege
- national judo - not based on her nationality - Dual Burden
commission v germany
Guiot
- the Belgium legal requirement was not necessary to protect the workers as the scheme in Luxembourg already did this.
MS justifying a national rule which restricted freedom to provide services
Schindler
- lottery - fraud
Deliege
- national judo - not based on her nationality
commission v germany
- dual burden
Guiot
- the Belgium legal requirement was not necessary to protect the workers as the scheme in Luxembourg already did this.
Derogations in Article 52
Derogations in Article 52 applies
- public policy
- public security
- public health
Omega
- ban was justifiable on public policy
Peerbooms
Watts
Imperative Reasons
Sager 4 Conditions - apply to all - justified by imperative reasons - objectively necessary - does not exceed what is necessary
van Binsgergen
restriction would not be incompatible when abt rules of professional conduct + justified by general good and indistinct
C v Germany (Insurance)
requirement of agents authorisation justified to protect policy holders
also
DUAL BURDEN
Schindler
high risk of fraud
Deliege
Not based on nationality
Guilot
Dual Burden
Rights granted by Article 56
The right for a service provider to move to another Member State and to reside there in order to provide services is embodied in Article 57 TFEU itself
> directive 2004/38 Article 6 - general right for a UC and FM to remain 3 years. Longer if self employed
Rush
- right for a service provider to bring its own workplace to the MS
- now governed by Directive 96/71
Right to move and reside
Van binsbergen
- freedom to provide services includes the freedom to receive those services
Luisi
- foreign currency - in order to enable services to be provided, the recipients of services had the right to go to another Member State without restriction in order to receive a service there.
Social rights
- access to certain social rights on the same basis as nationals of host MS
Commission v Italy (Italian Housing)
Articles 49 and 56 were an extension of the non-discrimination principle in Article 18.
Cowan
- mugged - refusal to award Cowan compensation was discriminatory, contrary to Article 18, as French nationals did not have to be resident in France in order to be eligible for the compensation.
SOCIAL RIGHTS
- access to certain social rights on the same basis as nationals of host MS
Commission v Italy (Italian Housing)
Articles 49 and 56 were an extension of the non-discrimination principle in Article 18.
Cowan
- mugged - refusal to award Cowan compensation was discriminatory, contrary to Article 18, as French nationals did not have to be resident in France in order to be eligible for the compensation.
What about Public Services - schools
Schools
Humbel
- French nationals who lived in Luxembourg.
- charged a fee, called the minerv
- argued that it restricted their right to receive services under Article 56
- held that courses provided within a national education system do not constitute a service in return for remuneration. This was because the State provides a national education system as part of its general duty towards its citizens
Wirth
- denial by German authorities of an education grant by a German national to a study a course in jazz saxophone at an Arts college in the Netherlands.
State funded education did not fall
- State funded education did not fall
- he Court did express the view that higher education establishments which are financed essentially out of private funds, in particular by students or their parents, and which seek to make an economic profit can constitute services within the meaning of Article 56 TFEU.
(contrast with Gravier)
What about Public Services - health care
Imposition of requirements of prior authorisation for treatment abroad before they will reimburse a person for that treatment
Kohll
- sickness insurance was paid to the Union des Caisses de Maladie (‘UCM’) by employees and employers.
- reimbursed by the UCM upon production of a receipt.
- luxemberg law - an insured person who wanted to obtain medical treatment in another Member State had to receive prior authorisation from the UCM for the cost to be reimbursed
- Mr Kohll had been refused authorisation for his daughter to have orthodontic treatment in Germany on the grounds that it was not urgent and that treatment could be received in Luxembourg
- it did deter them from doing so by making the reimbursement of the costs incurred in that Member State subject to prior authorisation. This was a barrier to the freedom to provide services.
Justifications….
> sought to justify the requirement of prior authorisation by arguing that it constituted the only effective and least restrictive means of controlling expenditure on health and balancing the budget of the social security system.
< CoJ - whilst aims of a purely economic nature cannot justify a barrier to the freedom to provide services, the risk of seriously undermining the financial balance of the social security system may constitute an overriding imperative reason capable of justifying a barrier of that kind.
but in this case, reimbursement would have had no significant effect on the financing of the social security system as Mr Kohll had asked to be reimbursed at the rate applied in Luxembourg
> public health derogation under Article 52
< accepted, in principle that this could fall within the public health derogation in so far as the maintenance of a treatment facility or medical service on national territory is essential for the public health
< it found that no one had made any observations to prove that the specific rules at issue were indeed necessary to provide a balanced medical and hospital service accessible.
Peerbooms
> patients in the Netherlands received free treatment with the insurance fund paying the health care provider directly
> a patient would have to obtain prior authorisation from their sickness insurance fund if he wished to receive treatment from a health care provider which the fund did not have an agreement with in the Netherlands or from a health care provider abroad.
> granted if the proposed treatment was regarded as normal in the professional circles concerned and it was necessary for the health care of the person
> the applicants in this case had paid for their medical treatment abroad without obtaining prior authorisation from their sickness insurance fund + fund refused to reimburse
< CoJ - rejected arguments that the provision of hospital care could not constitute an economic activity covered by Article 56, particularly where it is provided free of charge under a sickness insurance scheme or the cost of it is reimbursed.
< In any event, the medical treatment at issue in this case had not been provided under a sickness insurance scheme. The claimants had themselves directly paid the medical establishments where they had received their treatment. The Court then went on to reiterate that a requirement of prior authorisation was a restriction because it deterred or prevented persons from using health care providers established in another Member State.
The Court distilled three grounds from Kohl on which restrictions to the exercise of
freedom to provide services in the sphere of hospital treatment could be justified:
1. The possible risk of seriously undermining a social security system’s financial balance. This was an imperative reason.
2. The need to maintain a balanced medical and hospital service open to all. This fell under Article 52’s public health derogation.
3. That the maintenance of treatment capacity or medical competence on national
territory is essential for the public health, and even the survival of the population.
This also fell under Article 52’s public health derogation.
R (Watts)
- NHS
- hip op in france
- article applicable also where a person wants reimbursement from a free national health service funded out of general taxation
- the requirement of prior-authorisation was a restriction on the freedom to provide services but that this was capable, in principle, of being justified for the reasons set out in Garaets-Smits and Peerbooms relating to the need for planning
- contingent on the restriction being based on objective and non-discriminatory criteria which are known in advance so as to ensure that it is not used arbitrarily.
- the regulations which governed the NHS in England and Wales did not provide such criteria for granting or refusing the prior authorisation for reimbursing of the cost of hospital treatment provided in another Member State. Moreover, it held that the Primary Care Trust should not have based its decision simply on the basis of the waiting lists without making an obj assessment of mrs watt’s case
CoJ - must balance the objective of the free movement of patients against overriding national objectives relating to management of the available hospital capacity, control of health expenditure and financial balance of social security systems
Acknowledged that MS to justify refusal of funding for treatment abroad on budgetary grounds
the rights under Article 56 had to be balanced against the considerations ‘relating to management of the available hospital capacity, control of health expenditure and financial balance of social security systems’. Directive 2011/24 now lays down rules for facilitating access to cross-border healthcare. Chapter III of the Directive deals with the reimbursement of costs for cross border health care.
What happened in Kohll
Kohll
sickness insurance. Pay to see them reimbursed. Prior authorisation. Refused as not urgent.
This was a barrier to provide services
CoJ
1. balancing the budget - could be imperative reason. No
2. public Health - could fall under. No.
What happened in Peerbooms
Peerbooms
- free treatment w insurance paying health care provider. Prior authorisation + normal and necessary
Restriction
3 Grounds from Kohl
1. Imperative Reason - undermining social security financial balance
2. Public Health - balanced medical service for all
3. Public Health - maintenance of treatment capacity
prior authorization is justified
normalcy justified
necessary justified
What happened in R (Watts)
R (Watts)
- NHS
- hip op in France - authorisation needed
- prior-authorisation was a restriction on the freedom but could be justified based on reasons in K + P
- had to be objective and non-discriminatory criteria
not justified
BUT
rights from article 56 have to be balanced against consideration of hospital capacity, health expenditure and financial balance
Other public services
Commission v Spain (museum entrance fees)
Spanish nationals were able to enter for free but foreigners were only entitled to free admission if they resided in Spain or were under 21 years of age.
In breach of articles 18 and 56 TFEU
Article 56 guaranteed the right for tourists, as recipients of services, to access those services under the same conditions as nationals.
What about the fact they are financed by the state ….
What is the Services Directive and its history
Directive 2006/123
Origins - EU Council Lisob 2000
State of the Internal Market for Services
Bolkstein draft - ‘country of origin’ + no mention of imperatives
McGeery Draft - basis for Directive
MS
Set own national rules - justified on security, health or enviornment
No mention of other imperative requirements
Professional Qualifications
Directive 2005/36
1) pursuing regulated profession outside of MS
2) hen service is legally established in one MS and moves to another temporarily
X-Steur
Has to be physically moved
MS is prohibited from restricting providing for any reasons to do with qualifications Can require (Art 7) - written dec - proof of nationality - attestation of legality - evidence of qualification
Aptitude Test
- public health or safety and does not benefit from recognition under Chp2 +3 and substantial difference between training
Penarroja - mutual recognition principles from Vlassapoulou are also applicable
