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Free Provision of Services

Free Provision of Services . Agenda. Part I Introduction Challenges for Turkish companies European legal framework Part II Tackling internal market barriers Case studies. Introduction. Gross value added - EU 27. Source: EUROSTAT, OECD. Gross value added - Turkey .

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Free Provision of Services

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  1. Free Provision of Services

  2. Agenda • Part I • Introduction • Challenges for Turkish companies • European legal framework • Part II • Tackling internal market barriers • Case studies

  3. Introduction

  4. Gross value added - EU 27 Source: EUROSTAT, OECD

  5. Gross value added - Turkey

  6. Employment - EU 27

  7. Employment - Turkey

  8. World Trade Source: WTO Trade Statistics

  9. World Trade Source: WTO Trade Statistics

  10. Challengesfor Turkey

  11. State ofplay • Accessionnegotiationsstarted in October 2005 • Screening completed • Importantalignmentneeds • Introducefreedomtoprovideservices • Rightofestablishment • Mutual recognitionof professional qualifications • Chapter suspended in December 2006

  12. European Legal Framework

  13. Internal Market Area without internal borders in which the free movement of goods, persons, services and capital is ensured in accordance with EC Treaty (Art 14 EC Treaty)

  14. Basics Services can be provided... • On a temporary basis - Freedom to provide services (Art 49 et seqq ECT) • Stable continuous manner – Freedom of establishment (Art 43 et seqq ECT) • No general time limit • Case by case decision taking into account duration, regularity, periodicity and continuity

  15. Basics • Cross border element needed • Precedence of Community law • Direct effect • Limits for public authorities and to some extend (collective) private action • State liability

  16. Freedom to provide services • Restrictions on freedom to provide services within the Community are prohibited (Art 49 EC Treaty) • Beneficiary • Service provider - EU-national established in Community • Service recipient – EU-national OR EU-resident • Service itself

  17. Service withinthe meaning of the EC Treaty • Cross border activity not covered by other freedom • Posting of workers is covered by provision of services • Provided for remuneration (recipient/third party) • Temporary basis/absence of a stable and continuous participation in the host MS

  18. V • VV

  19. Freedom to provide services • Foreigners to be treated as nationals - no discrimination • e.g. nationality, residence, language requirements • Abolition of any national restriction • National measure liable to prohibit, impede or render less advantageous the provision of a service (delays, additional costs) • Even if no discrimination between nationals and foreigners

  20. Prohibited restrictions • Bans (e.g. gambling) • Obligation to have permanent establishment/residence • Requirement to obtain authorisation/registration • Ban on setting up infrastructure (office, chamber) • Minimum number of employees • Compulsory registration/membership with professional body • More advantageous terms/prices for residents

  21. Freedom of establishment • Restrictions on freedom of establishment are prohibited (Art 43 EC Treaty) • Carry on an economicactivity in a stableandcontinuousmanner in other MS • Right to open agencies, branches or subsidiaries • Right to set up and manage undertakings • Right to take up and pursue self-employed activities

  22. Freedom of establishment • Beneficiary • EU nationals • Companies/firms formed in accordance with law of a MS and having registered office/central administration/principal place of business within Community

  23. Freedom of establishment • Foreigners to be treated as nationals - no discrimination • e.g. nationality, residence, language requirements, economic need tests • Abolition of any national restriction • National measure liable to prohibit, impede or render less advantageous the provision of a service (delays, additional costs) • Even if no discrimination between nationals and foreigners

  24. Prohibitedrestrictions • Prohibition to have an establishment in more than one MS • Restrictions to choose between principal/secondary establishment • Involvementofcompetitorsin authorisationdecisions • Insurance from national company • Quanatitativerestrictions • Specific legal form • Oneofficerule • Minimum numberofemployees

  25. Grounds for justification I • Activities directly/specifically connected with the exercise of official authority (Art 45 ECT) • Grounds of public policy, public security or public health (Art 46 ECT) • May justify (non) discriminatory restrictions

  26. Grounds for justification II • Imperative requirements in the general interest (ECJ) • e.g. consumer protection, protection of workers, road safety, environmental protection, financial balance of of health system • No harmonisation • Suitable for securing overriding requirements relating to public interest • Not go beyond what is necessary (provision of services vs. establishment) • May justify only non-discriminatory restrictions

  27. Recognition of Professional Qualifications

  28. Recognition of Professional Qualifications • MS freetorequirequalifications • Qualificationsacquired in other MS havetoberecognised • Directive 2005/36/EC • Different requirementsfor • Service provision (temporaryandoccasional) • Establishment (permanent business)

  29. Recognition of Professional Qualifications • Service Provision: • professionregulated in home MS: immediateserviceprovision • profession not regulated in home MS: 2 yearsexperienceduringprecedent 10 yearsneeded • publichealthandsafetyimplications: additional checks/requirementspossible

  30. Recognition of Professional QualificationsService Provision • Written declaration in advance may be required • Documents needed: • Proof of nationality and legal establishment in MS to legally pursue activity • Evidence of professional qualification/2 years experience • No registration with or membership of professional organisation, excepted pro forma membership • No registration with public social security body

  31. Recognition of Professional Qualifications • Establishment: • General system: mutual recognitionofdiplomas, certificates, attestations; aptitudetestsandadaptationperiodspossible • Recognition ofexperience: mostcraftsandtradeprofessionscovered; proofofexperienceandtrainingleadstorecognition • Specificautomaticrecognition: medicalprofessions

  32. Everything is perfect? • Many problems/obstacles remain • Internal Market in services is key for Lisbon Agenda • Only 20% of trade in the Internal Market

  33. Services Directive

  34. Objectives • Establish a genuine Internal Market in Services • Legal Security • Economic Growth and Job Creation • No liberalisation of SGEI, no privatisation of public entities

  35. Scope I • “All” services covered • Directive does not cover: Non-economic services of general interest, financial services, electronic communications services, transport services, temporary work agencies, healthcare services, audiovisual services, gambling, official authority, social services, private security services, notaries, taxation

  36. Scope II • Private International Law unchanged • Labour Law (Posting of Workers Directive) unchanged • Compliance with core conditions of work of the host MS • Priornotificationofpostingmayberequired • Recognition of professional qualifications unchanged

  37. AdministrativeSimplification • Simplification of procedures • Points of single contact • Right to information • Complete all procedures /formalities needed • Procedures by electronic means

  38. Freedom of establishment • Permanent change to other MS • Authorisation may be required, if: • Non discriminatory, necessary, proportionate • Transparent and predictable criteria and procedures • No duplication of requirements • Prohibited requirements • e.g. Nationality, residence, economic need test • Requirements to be evaluated • e.g. Quantitative/territorial restrictions, minimumnumberofemployees, fixedminimumand/ormaximumtariffs

  39. Free movement of services • Temporary and occasional work in other MS • Country of origin principle changed into „principle of non obstruction“ • Requirements only if • Non-discrimination • Necessity (public policy/security/health, environment) • Proportionality • Safeguard clause • Black list (e.g. establishment, authorisation, ban on infrastructure, equipment) • Screening

  40. Limited Harmonisation • Information obligations on providers (name, contact details, authorisation, after-sales guarantee, price/main features of the service,…) • Professional liability insurance and guarantees • Measures to promote service quality (certification, quality charter, standards, settlement of disputes)

  41. Administrative cooperation • Obligation to cooperate • Information exchange and mutual assistance • Supervision by MS best placed • Internal Market Information System

  42. The Directive is … • No revolution • Social, labour, environmental standards maintained and quality secured • Value Added – less bureaucracy, less barriers, more legal security • Unsolved • Enforcement of administrative decisions • Control measures for posted workers

  43. Tackling internal market barriers

  44. Content • Introduction • Tools to fight internal market problems • Conclusions

  45. Introduction • 99,6% of WKÖ members are SMEs • 89,8% of WKÖ members are micro enterprises • 59% Export Quota • EU market is essential for Austria and its SMEs

  46. Introduction • Well functioning of Internal Market priority for WKÖ • Lobbying (Services Directive, Mutual Regonition,...) • Support services for Members • Enterprise Europe Network within EU-Department • Provides information, analysis and support • about 290 requests/year related to Internal Market • some 50 Internal Market Problems • SMEs need fast, cheap and reliable solutions

  47. Tools

  48. Preventing Obstacles - Notification Procedure • Directive 98/34/EC • MS havetonotifydrafttechnical regulations relating to productsandinformationsocietyservicesbeforeadoption • Technical regulationnot notified cannotbeapplied • Commissionand MS canexaminedraftduring standstill periods • Business organisationscanraiseobjections via EC/MS • Deatailedopinionextendsof standstill period • Solutions for 95% ofcases

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