Prohibited Establishment Requirements

Prohibited Establishment Requirements in Europe

Prohibited establishment requirements in relation to the E.U. Services Directive

The following is an examination of prohibited establishment requirements regarding the European Union Servicies Directive [1]:

Prohibited establishment requirements: Freedom of Establishment

Article 14 establishes a list of requirements which Member States cannot impose for access to or exercise of a service activity. These requirements are discriminatory or are in other ways particularly restrictive and thus cannot be maintained. In many cases the ECJ has already found them to be incompatible with Article 43 of the EC Treaty.

In order to ensure proper implementation, Member States will have to examine their legislation, and remove requirements of the type listed in Article 14 in a systematic way and for all service activities covered by the Directive. Member States are also prevented from newly introducing such requirements in the future. In view of the very restrictive nature of the requirements listed in Article 14, and the fact that in many instances they have been found incompatible with the EC Treaty, Member States should consider removing them also in sectors not covered by the Services Directive.



  1. Information on prohibited establishment requirements based on the EU Services Directive Handbook, UK Government

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