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Main elements of jurisprudence on which the Services Directive is based and key definitions

Main elements of jurisprudence on which the Services Directive is based and key definitions . Dainis Matulis Head of Division of the EU Market for Goods and Services, Internal Market Department Belgrade, 15 April 2011. Introduction I. The scope of Services Directive:

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Main elements of jurisprudence on which the Services Directive is based and key definitions

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  1. Main elements of jurisprudence on which the Services Directive is based and key definitions Dainis Matulis Head of Division of the EU Market for Goods and Services, Internal Market Department Belgrade, 15 April 2011

  2. Introduction I The scope of Services Directive: • Services Directive and Article 49 TFEU (ex Art.43 TEC) and Article 56 TFEU (ex Art.49 TEC): • Horizontal direct effect of Article 49 and 56 TFEU; • Recital 30: There is already a considerable body of Community law on service activities.This Directive builds on, and thus complements, the Community acquis. Conflicts between this Directive and other Community instruments have been identified and are addressed by this Directive, including by means of derogations [...] The existence of such a conflict should be determined in compliance with the rules of the Treaty [...]. • Broad or dynamic content of certain concepts, e.g. Article 4(6), 4(8): • ECJ jurisprudence could be used as a source of reference to clarify certain concepts introduced by the directive; • Overriding reasons recognized in the case law of the Court of Justice (a non explicit list).

  3. Introduction II Key definitions: • a service; • authorization schemes; • overriding reasons relating to the public interest; • tacit approval; • a temporary service. A brief overview of the jurisprudence: • the concept; • a legal framework.

  4. The concept of “a service” (I) Economic activity • Article 57 TFEU • Article 4(1) of the Directive: “Service" means any self-employed economic activity, normally provided for remuneration, as referred to in Article 50 of the Treaty; • Recital 7: This Directive establishes a general legal framework which benefits a wide variety of services while taking into account the distinctive features of each type of activity or profession and its system of regulation.

  5. The concept of “a service” (II) • “Having regard to the objectives of the Community, the practice of sport is subject to Community law only in so far as it constitutes an economic activity [...]. When such activity has the character of gainful employment or renumeratied service it comes more particularly within the scope [...] of Article 48-51 or 59-66 of the Treaty.”; • “[...] the Community provisions on [...] services not only apply to the action of public authorities but extend also to rules of any other nature aimed at regulating gainful employment and the provision of services in a collective manner. The abolition as between Member States of obstacles [...] to freedom to provide services would be compromised if the abolition of State barriers could be neutralised by obstacles resulting from the exercise, by associations or organisations not governed by public law, of their legal autonomy.”; • “It is irrelevant that the broadcasters generally do not themselves pay the cable network operators for relaying their programmes. Article 60 does not require the service to be paid for by those for whom it is performed.” • Case C-36/74 Walrave and Koch [1974] ECR 1405; Joined cases C-51/96 and C-191/97 Deliège [2000] ECR I-2549; Case 352/85 Bond van Adverteerders [1988] ECR 2085.

  6. The concept of “authorization schemes” (I) Article 9: Authorisationschemes • Member States shall not make access to a service activity orthe exercise thereof subject to an authorisation scheme unlessthe following conditions are satisfied: • the authorisation scheme does not discriminate against theproviderinquestion; • the need for an authorisation scheme is justified by an overriding reasonrelating to the public interest; • the objective pursued cannot be attained by means of a less restrictive measure, in particular because an a posteriori inspection would take place too late to be genuinely effective. • Conditions replicate the requirements of the jurisprudence

  7. The concept of “authorization schemes” (II) Non-discrimination • “In the perspective of a single market and in order to permit the realisation of itsobjectives, that freedom likewise precludes the application of any national legislationwhich has the effect of making the provision of services between Member States moredifficult than the provision of services purely within one Member State”; • “the Treaty requires not only the eliminationof all discrimination against a person providing services on the ground of his nationality butalso the abolition of any restriction, even if it applies without distinctionto nationalproviders of services and to those of other Member States, when it is liable to prohibit orotherwise impede the activities of a provider of services established in another MemberState where he lawfully provides similar services”. • Case C-381/93 Commission v France [1994] ECR I-5145; Case C-76/90 Säger [1991] ECR I-4221; Case C-198/89 Tourist Guides Greece [1991] ECR I-727.

  8. The concept of “authorization schemes” (III) Proportionality • “[...] the proportionality of the restriction at issue, it is settled case-law thatrequirements imposed on the providers of services must be appropriate to ensureachievement of the intended aim and must not go beyond what is necessary in order to achieve that aim [...]”; • “[...] the application of national provisions to providersof services established in other Member States must be such as to guarantee theachievement of the intended aim[...]”; • Case C-6/98 ARD [1999] ECR I-7599; Case C-288/89 Mediawet I [1991] ECR I-4007.

  9. The concept of “authorization schemes” (IV) Article 10: Conditions for the granting of authorisation • Member States shall not make access to a service activity orthe exercise thereof subject to an authorisation scheme unlessthe following conditions are satisfied: • Authorisation schemes shall be based on criteria which preclude the competent authorities from exercising their power of assessment in an arbitrary manner. • The criteria shall be:non-discriminatory;justified by an overriding reason relating to the public interest;proportionate to that public interest objective;clear and unambiguous;objective;made public in advance; transparent and accessible. • the objective pursued cannot be attained by means of a less restrictive measure, in particular because an a posteriori inspection would take place too late to be genuinely effective. • Conditions replicate the requirements of the jurisprudence.

  10. The concept of “overriding reasons relating to the public interest” (I) The right of establishment • Article 52 TFEU • Article 4(8) of the Directive Free movement of services • Article 62 TFEU • Article 16(3) of the Directive • “Article 49 EC [56 TFEU] requires not only the elimination of all discrimination ongrounds of nationality [...] but also the abolition of any restriction, even if itapplies without distinction to national providers of services and to those ofother Member States, which is liable to prohibit or further impede theactivities of a provider of services established in another Member State [...]. • Case 17/00 De Coster [2001] ECR I-9445; Joined CasesC-544/03 and C-545/03 Mobistar & Belgacom Mobile [2005] ECR I-7723.

  11. The concept of “overriding reasons relating to the public interest” (II) • Article 16 of the Directive provides no reference to the “public interest”; • Article 3(3) of the Directive: “Member States shall apply theprovisions of this Directive in compliance with the rules ofthe Treaty on the right of establishment and the free movement of services.” • The Services Directive and TFEU could be interpreted by means of a systematical and/or teleological analysis. • No fundamental differences between two freedomsas far as it concerns the justification for existing restrictions.

  12. The concept of “a tacit approval” (I) Article 14: Authorisation procedures • Recital 43: “[...]it is necessary to establish principles of administrative simplification, inter alia through the limitation of the obligation of prior authorisation to cases in which it is essential and the introduction of the principle of tacit authorisation by the competent authorities after a certain period of time elapsed. Such modernising action [...]is intended to eliminate the delays, costs and dissuasive effects which arise, for example, from unnecessary or excessively complex and burdensome procedures, the duplication of procedures, [..] the arbitrary use of powers by the competent authorities, indeterminate or excessively long periods before a response is given, [...]”, etc. • Article 14(3): “Failing a response within the time period set or extended in accordance with paragraph 3, authorisationshall be deemed to have been granted. Different arrangements may nevertheless be put in place, where justified by overriding reasons relating to the public interest, including a legitimate interest of third parties.”

  13. The concept of “a tacit approval” (II) Relevant provisions: • Article 10defines conditions for the granting of authorisation; • Article 13(1): Authorisation procedures and formalities shall be clear, made public in advance and be such as to provide the applicants with a guarantee that their application will be dealt with objectively and impartially. • Article 13(3): Authorisation procedures and formalities shall provide applicants with a guarantee that their application will be processed as quickly as possible and, in any event, within a reasonable period which is fixed and made public in advance. [...] When justified by the complexity of the issue, the time period may be extended once, by the competent authority, for a limited time.

  14. The concept of “a tacit approval” (III) • “Silenceequalsassent” procedure (CaseofLatvia): • Principleisnottransposedintonationallaw; • Administrativeprocedurelawclearly defines thetime periods forprocessinganapplication (fullyincompliancewithArtcle 10 and 13); • Pursuant to LatvianAdministrativeViolations Code, fortheprovisionofregulatedserviceswithoutanauthorization a servicesproviderwillbeimposed a fine; • Nationalauthoritiescomplywithdeadlinesfortheprocessionofapplications. • “[...] tacit authorisation, as in the “silence equals assent” procedure, is incompatible with the provisions ofDirective no. 80/68. Clear and precise provisions are necessary inconformity with the principle of the certainty of the law [...].” Case C-360/87 Commission v. Italy [ 99 ] ECR I-79.

  15. The concept of “a temporary service” (I) Freedom to provide services • Article 16(1) “Member States shall respect the right of providers to provide services in a Member State other than that in which they are established. The Member State in which the service is provided shall ensure free access to and free exerciseof a service activity within its territory.” • Recital 79: “The Court of Justice hasconsistently held that Member States retain theright to take measures in order to preventproviders from abusively taking advantage ofthe internal market principles. Abuse by aprovider should be established on a case by case basis.”

  16. The concept of “a temporary service” (II) • “[...]the temporary nature of the provision of services [...] is to be determined in the light of its duration, regularity, periodicity and continuity”.; • “No provision of the Treaty affords a means of determining, in an abstract manner, the duration or frequency beyond which the supply of a service or of a certain type of service in another Member State can no longer be regarded as the provision of services within the meaning of the Treaty.”; • “The fact that the activity is temporary does not mean that the provider of services [...]may not equip himself with some form of infrastructure in the host Member State [...] in so far as such infrastructure is necessary for the purposes of performing the services in question.”; • CaseC-55/94 Gebhard [1995] ECR I-4165; Case C-58/98 Corsten [2000] ECR I-7919; Case C-131/01 Commission v Italy [2003] ECR I-1659; Case C-215/01 Schnitzer [2003] ECR I-4847.

  17. The concept of “a temporary service” (III) Derogationsfromtheprinciple: • Article 4(8) isnotapplicable; • Article 16: • non-discrimination,necessityandproportionality; • justification for reasons of public policy, public security, public health or the protection of the environment. • Article 18: Case-by-casederogations “[...] in exceptional circumstances only, a Member State may, in respect of a provider established in another Member State, take measures relating to the safety of services.” • Recital 41 “The concept of ‘public policy’, as interpreted by the Court ofJustice, covers the protection against a genuine and sufficiently serious threataffecting one of the fundamental interests of society and may include, inparticular, issues relating to human dignity, the protection of minors andvulnerable adults and animal welfare. Similarly, the concept of public securityincludes issues of public safety.” Case 41/74 Van Duyn [1974] ECR 1337

  18. Conclusions • Clear and precise provisions are necessary inconformity with the principle of the certainty of the law; • Conditions replicate the requirements of the jurisprudence; • OverridingreasonsrecognizedinthecaselawoftheCourtofJustice (a non-exhaustivelist); • ECJ jurisprudence couldbeusedas a sourceof reference to clarifycertainconceptsintroducedbythedirective; • The interpretation of the provisions defining the scope of thedirectiveiscrucial.

  19. For further information or questions pleasecontact the following address: Brīvības iela 55, Rīga, LV 1519Phone: +371 670 13 101Fax: +371 672 80 882E-mail: pasts@em.gov.lv Website: www.em.gov.lv

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