Free Movement of Services Flashcards
Provision prohibiting restrictions on services
Art 56 TFEU
The Services Directive
Directive 2006/123/EC
Problem Q stages (5)
- Is it a service?
- What is it governed by? (directive, specific leg, case law and art 56 directly)
- Is it restricted
- Is the restriction justified?
- Is the restriction proportionate?
Schindler (What is a service?)
What is a service: Distinction from goods
Buying a lottery ticket was provision of a service as the ticket itself was ancillary to the substance of the transaction
Schnitzer
What is a service: distinction from establishment
Factors considered in evaluating permanence of an establishment:
- duration of provision of service
- regularity
- periodical nature or continuity?
- Infrastructure
(Provider may remain temporary while having some infrastructure in another MS if it is necessary for the purpose of performing the services in question)
Van Binsbergen
What is a service: Must have a cross border element
Service provider may travel to another state:
Dutch lawyer traveled to Netherlands to represent clients
Luisi and Carbone (What is a service)
What is a service: Must have a cross border element
Recipient can travel to another state to receive a service:
Laws obstructing citizens travelling to another MS to receive medical services fel within art 56
Commission v Italy (Tour Guides)
What is a service: Must have a cross border element
The recipient and the provider can both travel and meet in a third member state
Sketteministeriet v Verstergard
What is a service: Must have a cross border element
The service itself can move:
Danish company organised training courses for Dutch workers on Greek islands.
Held Art 56 could apply, it is sufficient for services to be provided to the nationals of an MS on the territory of another MS irrespective of the place of establishment of the provider or the recipient of the service
ITC
What is a service: Must have a cross border element
The service itself can move:
A Domestic contract can fall within Art 56 if an important part of the work for which the provider is paid takes place abroad
Provision stating services must be normally provided for remuneration
Art 57 TFEU
Chalmers (textbook)
What is a service: Normally provided for remuneration
Meaning of ‘normally’ has not yet been discussed by the court but is probably intended to make way for the occasional services provided for free e.g for marketing purposes
Humbel
What is a service: Normally provided for remuneration
Not every payment is remuneration:
Essential characteristic is that remuneration provides consideration
Can be contrasted with payments that are intended to fund/support the provider with a non-commercial motive e.g university education
Tolsma
What is a service: Normally provided for remuneration
Money given to buskers could not be seen as remuneration as there was no obligation to pay
Gaerets-Smits (What is a service)
What is a service: Normally provided for remuneration
Motivation of the provider is not important:
there is no need for service providers to make a profit
Arblade
Restrictions on services: what is a restriction?
non-discriminatory measures may be caught by art 56 if they are ‘liable to prohibit, impede or render less advantageous the activities of a provider or services established in another MS where he lawfully provides similar services’
What is a restriction?
Can be direct or indirect
Enough that there is a possibility that a measure could hinder free movement of services
Can be discriminatory or non discriminatory
Mobistar
Viacom Outdoor
Restrictions on services: what is a restriction?
Measures of which the only effect was to create additional costs which affect the provision of services between and within MSs equally do not fall within the scope of Art 56
Otherwise almost every tax or regulation would fall within art 56
Commission v Italy (motor insurance)
Restrictions on services: what is a restriction?
National rule prohibited motor insurers from rejecting a client, was argued foreign insurance companies would be deterred from offering insurance services in Italy by this obligation as they would incur extra costs in restructuring their business.
It was held that laws which are equally applicable, but in practice require foreign providers to adapt their business models do fall under art 56
Walrave and Koch
Restrictions on services: Horizontal application of art 56
Art 56 applied to the International Cycling Union as a private body as they are part of the regulation of an area of economic activity
Deliege
Restrictions on services: Horizontal application of art 56
Sport: Court tries to make a distinction between rules which are an inherent part of the regulation of the sport, and economic aspect of the activity:
Restrictions on participation were inherent to the organisation, do not fall under art 56
Meca Medina
Restrictions on services: Horizontal application of art 56
Sport: Court tries to make a distinction between rules which are an inherent part of the regulation of the sport, and economic aspect of the activity:
Sport is subject to community law only insofar as it constitutes an economic activity
Laval
Restrictions on services: Horizontal application of art 56
Labour regulations and activities of trade unions:
Compliance with art 56 required of rules which are not public in nature, but which are designed to regulate the provision of services
Viking line
Restrictions on services: Horizontal application of art 56
Labour regulations and activities of trade unions:
Held in the context of free movement law that 56 will apply merely because a private party may have the power to obstruct free movement
Seems to reason why this should not apply in the context of services
Provision listing statutory justifications on restrictions
Art 62 TFEU: Justifications in Art 52 apply (Public health, security, policy)
Applies to discriminatory and non-discriminatory measures
Gebhard
Justifying restrictions
Aside from under art 63, Restrictions on services may also be permitted if they are:
Non-discriminatory
Justified by an ORPI
Proportionate
Alpine investments
Justifying restrictions
There is no distinction between restrictions on the import of services and export of services: equally prohibited and equally open to justification
Webb
Justifying restrictions:
Restrictions will not be justified where the interest concerned is protected by legislation in the state of establishment
Requiring a service provider to undergo police checks similar to ones undergone in home state violated principle of mutual recognition
Sager
Justifying restrictions:
It is disproportionate to subject service providers to all the rules that would apply to them if they were established
This would deprive the provisions of the treaty whose object it is to guarantee freedom of services of their effectiveness
Cipolla
Justifying restrictions: Restrictions on marketing prices
rules which limit price competition may restrict trade, however fixed legal fees could be justified as minimum prices prevent excessive competition which could lead to lower standards
Court will take into account individual characteristics of the market when determining proportionality
Cornsten
Justifying restrictions: Access to regulated industries and professions
Dutch Architect working in Germany fined as he had not entered himself on the German register of skilled traders
In order to do this he had to pay a fee, and it took some time
Proportionality demanded the authorisation procedure should neither delay nor complicate the exercise of the freedom to provide services
Polyani (commentator)
The market society
Instead of the economy being embedded in social relations, social relations are embedded in the economic system
Features of the market society:
- The contract is central to the social relation
- Collective goods become measured as a series of individual entitlements that can be transacted
- Value placed on subjective preferences and desires (Justifies art 56, which grants a right for a citizen to transact what she desires)
Schindler (The market society)
Socially sensitive services:
Justification: it will not take a moral stance on whether socially sensitive services come within art 56- therefore they all do
Grogan
The Market society: socially sensitive services
Group being prohibited from distributing information about abortions in Ireland
Held that the termination of pregnancy is a medical activity normally provided for remuneration, therefore is a service
No matter how offensive/illegal a service may be in one state, if it is permitted in others then they can rely on Art 56
Courts will, however, heavily weigh in strong national feelings to its decision
Commission v Germany
Art 56 and the welfare state
Schools which are financed essentially by private funds must be regarded as a service for remuneration under art 56, irrespective of whether they have anything to do with the state itself
Relationship between art 56 and the welfare state
Have been brought closer together as public institutions are increasingly funded by private insurers or the consumers of their services, therefore bringing their services within the scope of the treaty
Luisi and Carbone (The welfare state)
Art 56 and the welfare state: The right to go abroad for healthcare
Hospital care is a service
Kohll
Art 56 and the welfare state: The right to go abroad for healthcare
Insurance polices only paying for health care in the home state are a restriction on freedom to receive services
Gaerets-Smits, Muller-Faure, Watts
Art 56 and the welfare state: The right to go abroad for healthcare
Confirmed a patient’s right to exit the national system of healthcare and choose treatment abroad
Merely budgetary or economic arguments cannot justify a restriction unless states can show that the national consequences of allowing free movement would be so great that they would threaten the stability and the quality of the system
MSs are free to define the scope of the healthcare for which they will pay, these limits apply equally and home and abroad: Eliminates any problem of elevated cost of treatment abroad
Gaerets-Smits (right to go abroad for healthcare)
Art 56 and the Welfare state
Dutch healthcare system refused to pay for experimental treatment in Austria as is only payed for treatment it considered ‘normal’
CJEU held definition of ‘normal’ must be derived from inherently international medical science, rather than national ideas of what was normal
Shows how MSs must define the scope of what they will pay for with care
A scheme of prior authorisation before going abroad for treatment is acceptable in an MS:
- Must have procedural safeguards
- Transparency
- Appeal opportunities
Muller-Faure (right to go abroad for healthcare)
Art 56 and the Welfare state
Increase in the cost of infrastructure resulting from free movement is capable of being restricted:
Hospital care: Great potential costs risks, restrictions on the basis of infrastructure can be justified
Non-hospital care: Infrastructure argument cannot apply
Watts
Mulle-Faure
(Right to go abroad for healthcare)
Art 56 and the welfare state
Waiting lists can only be justified as a legitimate method of healthcare system management if there is NO UNDUE DELAY
Undue delay should be decided on a case by case basis by looking at the concerns of the individual patient (e.g their broader health, career)
3 aspects to the services directive
- Scope and Application
- Administrative and bureaucratic procedures
- Coordinationprovisions
Scope and application of services directive
Applies to all services except those specifically excluded in art 2(2)
Art 3: it is residual
Art 16: Lists conditions for justification of restrictions
(non-discriminatory, necessary for public policy, security, health, protection of the environment, proportionate)
Proportionate
Therefore services governed by the directive CANNOT BE JUSTIFIED BY ORPIs
Services directive: relevant articles for administrative and bureaucratic procedures
Art 5(1)
Art 6
Art 7
Art 8
Services directive: relevant articles for coordination procedures
Art 22
Art 24
Arts 28-33 (administrative cooperation between national supervisory authorities)
Arts 18 and 35: Special emergency procedure for when a supervisory challenge is raised by cross-border services
