Freedom of establishment, free provision of services

Question 1

Sources of (Internal Market) Law

Answer 1

• primary law (TFEU)
• secondary law (Services Directive)
• case law

Question 2

FoE and FMS - primary law articles

Answer 2

FoE: Art. 49 TFEU
FMS: Art. 56 ff. TFEU

Question 3

Differentiation between establishment and services - list of criteria

Answer 3

Permanency?

• > Gebhard case (1995):
• duration
• regularity
• periodicity
• continuity

Question 4

Servitization

Answer 4

Adding services to products or vice versa
= bundling goods and services → boundaries disappear

-> traditionally dominance approach

Question 5

‘Three steps’ approach for legal analysis of FoE or FMS

Answer 5

1. SCOPE
   Does the situation fall within the scope of FMS (temporary) or FoE (permanent)?
2. RESTRICTION
   Is there a restriction under the applicable Article? If so, what type of restriction is it?
3. JUSTIFICATION
   Can the restriction be justified by an important interest? If so, is the measure proportionate?

Question 6

Scope - Assessment scheme

Answer 6

a. establishment v services: supra
b. who can invoke (beneficiary)? natural / legal person, MS national
c. who has to abide (addressee)? MS and some private entities
d. cross-border element
e. exercise of economic activity (Art. 57 TFEU)
f. situations outside the scope

Question 7

Scope: Cross-boarder element

Answer 7

Establishment:
– primary right of establishment:
• first establishment in a host MS other than your own
• relocation of a going concern
– secondary right of establishment:
• already established in one MS but adding another place of activity in another MS

Services:
– provider or recipient moving
– provider and recipient moving to another MS
(e.g. tourist guides)
– neither provider nor recipient moves but service moves

-> includes the freedom for the recipients of services to go to another MS in order to receive a service there (Cowan, 1989)

Question 8

Justification - two possibilities

Answer 8

• treaty derogations

- rule of reason

Question 9

Justification - Treaty derogations

Answer 9

Art. 52 (1) TFEU: Exemptions for public policy, public security or public health allowed

Question 10

Justification - rule of reason

Answer 10

• no discrimination
• no harmonisation
• overriding reason in the general interest (imperative reason of general interest, mandatory requirement, …)
• proportionality
– appropriate
– necessary, no less restrictive alternative available

Question 11

Principles of Service Directive 2006/123/EC

Answer 11

• about freedom of establishment and freedom to provide services
• legal basis: not internal market 114-115 but 53 and 62 TFEU
• Directive, not Regulation

Question 12

Scope of application of SD

Answer 12

• Art. 2 SD: sectors excluded
• Art. 3 SD: more specific EU law
• Art. 17 SD: excluded professions
• Art. 18 SD: case-by-case derogations
• not only about cross border situations, but also intra-MS situations

Question 13

Definitions in the SD

Answer 13

Art. 4 SD

e.g. services, establishment, overriding reasons

Question 14

Establishment: Black-listed requirements

Answer 14

Art. 14 SD -> prohibited per se

Question 15

Establishment: Grey-listed requirements

Answer 15

Art. 15 SD:
– justifiable under “rule of reason” kind of test
– verify non discrimination + overriding reason + proportionate suitable and least restrictive
– notify to Commission + veto right for Commission

Question 16

Services: Black-listed requirements

Answer 16

Art. 16 (2) SD -> in relation with service provider

Question 17

Services: Grey-listed requirements

Answer 17

Art. 19 SD -> in relation with recipient

Question 18

Justification of Service Directive

Answer 18

Art. 16 (3) -> no rule of reason requirement