Free Movement of Services

Question 1

Provision prohibiting restrictions on services

Answer 1

Art 56 TFEU

Question 2

The Services Directive

Answer 2

Directive 2006/123/EC

Question 3

Problem Q stages (5)

Answer 3

1. Is it a service?
2. What is it governed by? (directive, specific leg, case law and art 56 directly)
3. Is it restricted
4. Is the restriction justified?
5. Is the restriction proportionate?

Question 4

Schindler (What is a service?)

Answer 4

What is a service: Distinction from goods

Buying a lottery ticket was provision of a service as the ticket itself was ancillary to the substance of the transaction

Question 5

Schnitzer

Answer 5

What is a service: distinction from establishment

Factors considered in evaluating permanence of an establishment:

1. duration of provision of service
2. regularity
3. periodical nature or continuity?
4. Infrastructure

(Provider may remain temporary while having some infrastructure in another MS if it is necessary for the purpose of performing the services in question)

Question 6

Van Binsbergen

Answer 6

What is a service: Must have a cross border element

Service provider may travel to another state:
Dutch lawyer traveled to Netherlands to represent clients

Question 7

Luisi and Carbone (What is a service)

Answer 7

What is a service: Must have a cross border element

Recipient can travel to another state to receive a service:
Laws obstructing citizens travelling to another MS to receive medical services fel within art 56

Question 8

Commission v Italy (Tour Guides)

Answer 8

What is a service: Must have a cross border element

The recipient and the provider can both travel and meet in a third member state

Question 9

Sketteministeriet v Verstergard

Answer 9

What is a service: Must have a cross border element

The service itself can move:
Danish company organised training courses for Dutch workers on Greek islands.
Held Art 56 could apply, it is sufficient for services to be provided to the nationals of an MS on the territory of another MS irrespective of the place of establishment of the provider or the recipient of the service

Question 10

ITC

Answer 10

What is a service: Must have a cross border element

The service itself can move:
A Domestic contract can fall within Art 56 if an important part of the work for which the provider is paid takes place abroad

Question 11

Provision stating services must be normally provided for remuneration

Answer 11

Art 57 TFEU

Question 12

Chalmers (textbook)

Answer 12

What is a service: Normally provided for remuneration

Meaning of ‘normally’ has not yet been discussed by the court but is probably intended to make way for the occasional services provided for free e.g for marketing purposes

Question 13

Humbel

Answer 13

What is a service: Normally provided for remuneration

Not every payment is remuneration:
Essential characteristic is that remuneration provides consideration
Can be contrasted with payments that are intended to fund/support the provider with a non-commercial motive e.g university education

Question 14

Tolsma

Answer 14

What is a service: Normally provided for remuneration

Money given to buskers could not be seen as remuneration as there was no obligation to pay

Question 15

Gaerets-Smits (What is a service)

Answer 15

What is a service: Normally provided for remuneration

Motivation of the provider is not important:
there is no need for service providers to make a profit

Question 16

Arblade

Answer 16

Restrictions on services: what is a restriction?

non-discriminatory measures may be caught by art 56 if they are ‘liable to prohibit, impede or render less advantageous the activities of a provider or services established in another MS where he lawfully provides similar services’

Question 17

What is a restriction?

Answer 17

Can be direct or indirect
Enough that there is a possibility that a measure could hinder free movement of services
Can be discriminatory or non discriminatory

Question 18

Mobistar

Viacom Outdoor

Answer 18

Restrictions on services: what is a restriction?

Measures of which the only effect was to create additional costs which affect the provision of services between and within MSs equally do not fall within the scope of Art 56
Otherwise almost every tax or regulation would fall within art 56

Question 19

Commission v Italy (motor insurance)

Answer 19

Restrictions on services: what is a restriction?

National rule prohibited motor insurers from rejecting a client, was argued foreign insurance companies would be deterred from offering insurance services in Italy by this obligation as they would incur extra costs in restructuring their business.
It was held that laws which are equally applicable, but in practice require foreign providers to adapt their business models do fall under art 56

Question 20

Walrave and Koch

Answer 20

Restrictions on services: Horizontal application of art 56

Art 56 applied to the International Cycling Union as a private body as they are part of the regulation of an area of economic activity

Question 21

Deliege

Answer 21

Restrictions on services: Horizontal application of art 56

Sport: Court tries to make a distinction between rules which are an inherent part of the regulation of the sport, and economic aspect of the activity:

Restrictions on participation were inherent to the organisation, do not fall under art 56

Question 22

Meca Medina

Answer 22

Restrictions on services: Horizontal application of art 56

Sport: Court tries to make a distinction between rules which are an inherent part of the regulation of the sport, and economic aspect of the activity:

Sport is subject to community law only insofar as it constitutes an economic activity

Question 23

Laval

Answer 23

Restrictions on services: Horizontal application of art 56

Labour regulations and activities of trade unions:

Compliance with art 56 required of rules which are not public in nature, but which are designed to regulate the provision of services

Question 24

Viking line

Answer 24

Restrictions on services: Horizontal application of art 56

Labour regulations and activities of trade unions:

Held in the context of free movement law that 56 will apply merely because a private party may have the power to obstruct free movement
Seems to reason why this should not apply in the context of services

Question 25

Provision listing statutory justifications on restrictions

Answer 25

Art 62 TFEU: Justifications in Art 52 apply (Public health, security, policy) Applies to discriminatory and non-discriminatory measures

Question 26

Gebhard

Answer 26

Justifying restrictions Aside from under art 63, Restrictions on services may also be permitted if they are: Non-discriminatory Justified by an ORPI Proportionate

Question 27

Alpine investments

Answer 27

Justifying restrictions There is no distinction between restrictions on the import of services and export of services: equally prohibited and equally open to justification

Question 28

Webb

Answer 28

Justifying restrictions: Restrictions will not be justified where the interest concerned is protected by legislation in the state of establishment Requiring a service provider to undergo police checks similar to ones undergone in home state violated principle of mutual recognition

Question 29

Sager

Answer 29

Justifying restrictions: It is disproportionate to subject service providers to all the rules that would apply to them if they were established This would deprive the provisions of the treaty whose object it is to guarantee freedom of services of their effectiveness

Question 30

Cipolla

Answer 30

Justifying restrictions: Restrictions on marketing prices rules which limit price competition may restrict trade, however fixed legal fees could be justified as minimum prices prevent excessive competition which could lead to lower standards Court will take into account individual characteristics of the market when determining proportionality

Question 31

Cornsten

Answer 31

Justifying restrictions: Access to regulated industries and professions Dutch Architect working in Germany fined as he had not entered himself on the German register of skilled traders In order to do this he had to pay a fee, and it took some time Proportionality demanded the authorisation procedure should neither delay nor complicate the exercise of the freedom to provide services

Question 32

Polyani (commentator)

Answer 32

The market society Instead of the economy being embedded in social relations, social relations are embedded in the economic system

Question 33

Features of the market society:

Answer 33

1. The contract is central to the social relation 2. Collective goods become measured as a series of individual entitlements that can be transacted 3. Value placed on subjective preferences and desires (Justifies art 56, which grants a right for a citizen to transact what she desires)

Question 34

Schindler (The market society)

Answer 34

Socially sensitive services: Justification: it will not take a moral stance on whether socially sensitive services come within art 56- therefore they all do

Question 35

Grogan

Answer 35

The Market society: socially sensitive services Group being prohibited from distributing information about abortions in Ireland Held that the termination of pregnancy is a medical activity normally provided for remuneration, therefore is a service No matter how offensive/illegal a service may be in one state, if it is permitted in others then they can rely on Art 56 Courts will, however, heavily weigh in strong national feelings to its decision

Question 36

Commission v Germany

Answer 36

Art 56 and the welfare state Schools which are financed essentially by private funds must be regarded as a service for remuneration under art 56, irrespective of whether they have anything to do with the state itself

Question 37

Relationship between art 56 and the welfare state

Answer 37

Have been brought closer together as public institutions are increasingly funded by private insurers or the consumers of their services, therefore bringing their services within the scope of the treaty

Question 38

Luisi and Carbone (The welfare state)

Answer 38

Art 56 and the welfare state: The right to go abroad for healthcare Hospital care is a service

Question 39

Kohll

Answer 39

Art 56 and the welfare state: The right to go abroad for healthcare Insurance polices only paying for health care in the home state are a restriction on freedom to receive services

Question 40

Gaerets-Smits, Muller-Faure, Watts

Answer 40

Art 56 and the welfare state: The right to go abroad for healthcare Confirmed a patient’s right to exit the national system of healthcare and choose treatment abroad Merely budgetary or economic arguments cannot justify a restriction unless states can show that the national consequences of allowing free movement would be so great that they would threaten the stability and the quality of the system MSs are free to define the scope of the healthcare for which they will pay, these limits apply equally and home and abroad: Eliminates any problem of elevated cost of treatment abroad

Question 41

Gaerets-Smits (right to go abroad for healthcare)

Answer 41

Art 56 and the Welfare state Dutch healthcare system refused to pay for experimental treatment in Austria as is only payed for treatment it considered ‘normal’ CJEU held definition of ‘normal’ must be derived from inherently international medical science, rather than national ideas of what was normal Shows how MSs must define the scope of what they will pay for with care A scheme of prior authorisation before going abroad for treatment is acceptable in an MS: 1. Must have procedural safeguards 2. Transparency 3. Appeal opportunities

Question 42

Muller-Faure (right to go abroad for healthcare)

Answer 42

Art 56 and the Welfare state Increase in the cost of infrastructure resulting from free movement is capable of being restricted: Hospital care: Great potential costs risks, restrictions on the basis of infrastructure can be justified Non-hospital care: Infrastructure argument cannot apply

Question 43

Watts Mulle-Faure (Right to go abroad for healthcare)

Answer 43

Art 56 and the welfare state Waiting lists can only be justified as a legitimate method of healthcare system management if there is NO UNDUE DELAY Undue delay should be decided on a case by case basis by looking at the concerns of the individual patient (e.g their broader health, career)

Question 44

3 aspects to the services directive

Answer 44

1. Scope and Application 2. Administrative and bureaucratic procedures 3. Coordinationprovisions

Question 45

Scope and application of services directive

Answer 45

Applies to all services except those specifically excluded in art 2(2) Art 3: it is residual Art 16: Lists conditions for justification of restrictions (non-discriminatory, necessary for public policy, security, health, protection of the environment, proportionate) Proportionate Therefore services governed by the directive CANNOT BE JUSTIFIED BY ORPIs

Question 46

Services directive: relevant articles for administrative and bureaucratic procedures

Answer 46

Art 5(1) Art 6 Art 7 Art 8

Question 47

Services directive: relevant articles for coordination procedures

Answer 47

Art 22 Art 24 Arts 28-33 (administrative cooperation between national supervisory authorities) Arts 18 and 35: Special emergency procedure for when a supervisory challenge is raised by cross-border services