Services Provider Requirements

Services Provider Requirements in Europe

The list of requirements in Article 16(2) in relation to the E.U. Services Directive

The following is an examination of the list of requirements in article 16(2) regarding the European Union Servicies Directive [1]:

The list of requirements in Article 16(2): Requirements which can be imposed by Member States on cross-border services

In the Context of the Freedom to Provide Services clause and related derogations

The lists of requirements in Article 16(2) contains examples of requirements which in principle cannot be imposed by a Member State in the case of services provided into its territory by a provider established in another Member State. It also refers to requirements which normally cannot be imposed on recipients of services.

The examples of requirements mentioned in paragraph 2 have, to a large extent, already been the subject of the case law of the ECJ and have been found to be incompatible with Article 49 of the EC Treaty. On this basis, there is a strong presumption that such requirements cannot be justified by one of the four public interest objectives referred to in Article 16(3) since they will normally be disproportionate.

m the obligation to have an establishment in the territory where the service is provided

Article 16(2)(a) concerns requirements which oblige service providers from other Member States to set up an establishment in the Member State into which they wish to provide cross-border services. As stated by the ECJ, such requirements negate the right to provide cross-border services enshrined in Article 49 of the EC Treaty, since they make cross-border service provision impossible by imposing an obligation on the provider to have a stable infrastructure in the receiving Member State126.

m the obligation to obtain an authorisation or a registration

Article 16(2)(b) concerns requirements obliging service providers from other Member States to go through an administrative procedure in the form of an authorisation or a registration before they can actually commence providing their services. The ECJ has consistently held that such a type of prior control is only justifiable in exceptional cases if it is demonstrated that monitoring or a posteriori verification would be inefficient or come too late to prevent serious damage127. Article 16(2)(b) does not concern authorisation or registration schemes which are provided for in other Community instruments, such as in Directive 2005/36/EC on the recognition of professional qualifications.

The ban on setting up an infrastructure

Article 16(2)(c) deals with bans the receiving Member State imposes on setting up an infrastructure such as offices or chambers, etc. that service providers from other Member States may need to use for providing their services. A service provider cannot be obliged to have an establishment but he should have the possibility to use some sort of infrastructure, such as an office or the like, for carrying out cross-border service activities, for instance in order to receive clients or to store equipment which he uses when providing his services, as has been recognised by the ECJ128. m the application of specific contractual arrangements between the service provider and the recipient restricting the provision of the service by the self-employed

Article 16(2)(d) concerns requirements which prescribe specific contractual arrangements for the provision of particular services and that affect the provider's relation with his client, in particular his capability to enter into contractual relationships under service contracts. This would be the case if a Member States would exclude by law the possibility of carrying out certain activities as a self-employed person, for instance by requiring that they are always carried out in the context of an employment relationship. This would, for instance, include cases in which services provided by a tourist guide would not be recognised as services under national legislation prescribing an employment relationship between tourist guides and travel agencies organising tourist programmes129.

The obligation to possess a specific identity document

Article 16(2)(e) concerns requirements which oblige service providers to be in possession of a specific identity document issued by the Member State where the service is provided. The effect of such requirements is that they do not allow a service to be provided before such a document has been obtained from the authorities in the host Member State. Thus, they result in delays and complications, which is the reason why the ECJ has held such requirements to be disproportionate130.

Requirements affecting the use of equipment

Article 16(2)(f) concerns requirements restricting the use of equipment. Such requirements may prevent service providers from other Member States from using their habitual equipment, even though it is technically well suited. Examples are obligations to use particular types or brands of technical machinery (for instance, the use of certain measuring instruments) or requirements which subject the use of certain equipment to authorisations or similar administrative procedures131. It has to be understood that the notion of equipment covers tools, machines, working gear, etc. used by the service provider during the provision of the service, such as cranes used by a construction company. It does not cover material provided by the service provider which is consumed or remains with the recipient of the service after the service is completed, such as construction material which remains as part of the building. Furthermore, it should be noted that Article 16(2)(f) does not concern requirements which are necessary to protect health and safety at work and it does not prevent Member States from applying their specific requirements in that area, such as certain obligations regarding the use of dangerous machinery or safety equipment. This applies regardless of whether equipment is used by posted workers132or by self-employed persons.

Restrictions on recipients

Article 16(2)(g) refers to Article 19 of the Directive which concerns restrictions on recipients. Such restrictions also impact on service providers wishing to provide a service to customers in another Member State. These requirements, although not imposed directly on the provider but rather on his (possible) clients, deter potential recipients from resorting to service providers from other Member States or in certain cases even make it impossible for them to do so133.

Resources

Notes

  1. Information on the list of requirements in article 16(2) based on the EU Services Directive Handbook, UK Government

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