Free Movement of Services and Establishment.
1. Establishment and services deals with the right of natural persons and legal persons
(companies) to settle in a MS.
2. Key legislations and articles ;
Freedom of establishment is set out in Article 49 TFEU
Freedom to provide services is set out in article 56 TFEU.
Article 18 TFEU – principle of equality and non-discrimination on the grounds of
nationality.
Article 24 D/2004/38 – equal treatment directive.
The principle of mutual recognition of qualifications applies to this freedom. •
The right of EU citizens and their family members to move and reside freely within
other member states – Directive/2004/38.
Recognition of professional qualifications – Directive/2005/36
Services in the internal market – Directive/2006/123.
3. Establishment – integration into the national economy
4. Services – enables a self-employed person established in a MS in which he/she has already
integrated, to exercise any activity in another MS.
Definition of Factotame court defined establishment as the ‘actual pursuit of an
establishment economic activity through a fixed establishment in another
member state for an indefinite period’.
the differences Gebhard v Consiglio a) Establishment applies to activities that is ‘stable’ and
of Dell’Ordine Degli has a ‘continuous basis’.
establishment Avvocati e Procuratori di b) Services are temporary in nature. The service
and services; Milano [1995] – provider may have an office in the host state etc. the
court held that the service provider may set up the
infrastructure necessary for the purpose of performing
the service – e.g. office or chambers.
c) Whether it is establishment (49) or Services (56)
depends on the ‘duration, regularity, periodicity and
continuity of the provision of the services’.
Another extent to which MS’s are allowed to impose their own rules on
difference non-nationals. With regard to establishments, host state can
have their own rules. This has be scrutinized and subject to
proportionality.
Cassis the host state’s rules should not be applied to the same
extent to a person providing services on a temporary basis,
since they already have to comply with the rules in their
home state and this would amount to a ‘dual burden’
The meaning of services
temporary in Gebhard v Consiglio Dell’Ordine Degli
nature Avvocati e Procuratori di Milano [1995]
remuneration
Belgium v Humbel 1988 a state school was not held to be
providing services. However, a school
in the private sector, by fees paid by
pupils etc, is a provider of service
under 56 TFEU. (private funds and
receives profit).
Deliège (2000)
SPUC v Grogan (1991)
Non-discrimination, proportionality and the direct effect of Article 56
, Article 56 Van Binsbergen [1974] the Court established that Article 56 TFEU has direct
TFEU has effect.
direct effect The Court ruled that Article 56 TFEU specifically
applied to a situation where a service provider was
prevented from providing a service because of their
residence in another Member State.
In this case, a rule which required a person to be
‘habitually resident’ in the host state in order to
provide legal representation services there would
deprive Article 56 TFEU of all effect.
As the requirement to be established in the
Netherlands was easier for Dutch nationals to comply
with, the rule amounted to indirect discrimination on
grounds of nationality.
And, although in some cases a residence requirement
may be necessary to ensure the application of
professional rules of conduct, this was only if
supervision could not be achieved by less restrictive
means (i.e. it must be proportionate).
The extension Webb [1981] a factor in deciding if the host states requirement
of Article 56 is necessary or proportionate is whether the
TFEU to non- control on supervision is adequately carried out
directly by the service provider’s home state.
discriminatory Employment agency in UK supplied temporary
(or indistinctly staff in the Netherlands.
applicable) It had a UK license but the Dutch law also
rules was required one.
further Court stated that licensing is important and
developed legitimate and within the public interest to protect
workers.
The Dutch rules duplicated the UK rules thus both
license requirement wasn’t necessary
elaborated Säger v Dennemeyer Equally applicable rules. - First was established
rules should [1991]. The German law on patent renewal services reserved
be necessary the right to operate this service.
and It consisted of sending out reminders that patents
proportionate were about to expire and deals with the renewal
to the desired process to patent agents and lawyers.
objective. A UK company provided this to clients throughout EU
and especially Germany.
Operated lawfully in UK but did not comply with
requirements of German law.
A German competitor Sager brought an action against
the UK Company from operating in Germany.
Court held that there should be elimination of
discrimination against nationality AND abolition of
rules and restrictions, even if its non-discriminatory if it
impedes activities of a service provider established in
another Member state where he lawfully provides
similar services.
The court further held that non-discrimination should
be justified by:
1. Imperative reasons relating to public health.
2. Interest is not already protected by the home
state
3. Necessary and proportionate.
Services and Cross Border Activity
1. Establishment and services deals with the right of natural persons and legal persons
(companies) to settle in a MS.
2. Key legislations and articles ;
Freedom of establishment is set out in Article 49 TFEU
Freedom to provide services is set out in article 56 TFEU.
Article 18 TFEU – principle of equality and non-discrimination on the grounds of
nationality.
Article 24 D/2004/38 – equal treatment directive.
The principle of mutual recognition of qualifications applies to this freedom. •
The right of EU citizens and their family members to move and reside freely within
other member states – Directive/2004/38.
Recognition of professional qualifications – Directive/2005/36
Services in the internal market – Directive/2006/123.
3. Establishment – integration into the national economy
4. Services – enables a self-employed person established in a MS in which he/she has already
integrated, to exercise any activity in another MS.
Definition of Factotame court defined establishment as the ‘actual pursuit of an
establishment economic activity through a fixed establishment in another
member state for an indefinite period’.
the differences Gebhard v Consiglio a) Establishment applies to activities that is ‘stable’ and
of Dell’Ordine Degli has a ‘continuous basis’.
establishment Avvocati e Procuratori di b) Services are temporary in nature. The service
and services; Milano [1995] – provider may have an office in the host state etc. the
court held that the service provider may set up the
infrastructure necessary for the purpose of performing
the service – e.g. office or chambers.
c) Whether it is establishment (49) or Services (56)
depends on the ‘duration, regularity, periodicity and
continuity of the provision of the services’.
Another extent to which MS’s are allowed to impose their own rules on
difference non-nationals. With regard to establishments, host state can
have their own rules. This has be scrutinized and subject to
proportionality.
Cassis the host state’s rules should not be applied to the same
extent to a person providing services on a temporary basis,
since they already have to comply with the rules in their
home state and this would amount to a ‘dual burden’
The meaning of services
temporary in Gebhard v Consiglio Dell’Ordine Degli
nature Avvocati e Procuratori di Milano [1995]
remuneration
Belgium v Humbel 1988 a state school was not held to be
providing services. However, a school
in the private sector, by fees paid by
pupils etc, is a provider of service
under 56 TFEU. (private funds and
receives profit).
Deliège (2000)
SPUC v Grogan (1991)
Non-discrimination, proportionality and the direct effect of Article 56
, Article 56 Van Binsbergen [1974] the Court established that Article 56 TFEU has direct
TFEU has effect.
direct effect The Court ruled that Article 56 TFEU specifically
applied to a situation where a service provider was
prevented from providing a service because of their
residence in another Member State.
In this case, a rule which required a person to be
‘habitually resident’ in the host state in order to
provide legal representation services there would
deprive Article 56 TFEU of all effect.
As the requirement to be established in the
Netherlands was easier for Dutch nationals to comply
with, the rule amounted to indirect discrimination on
grounds of nationality.
And, although in some cases a residence requirement
may be necessary to ensure the application of
professional rules of conduct, this was only if
supervision could not be achieved by less restrictive
means (i.e. it must be proportionate).
The extension Webb [1981] a factor in deciding if the host states requirement
of Article 56 is necessary or proportionate is whether the
TFEU to non- control on supervision is adequately carried out
directly by the service provider’s home state.
discriminatory Employment agency in UK supplied temporary
(or indistinctly staff in the Netherlands.
applicable) It had a UK license but the Dutch law also
rules was required one.
further Court stated that licensing is important and
developed legitimate and within the public interest to protect
workers.
The Dutch rules duplicated the UK rules thus both
license requirement wasn’t necessary
elaborated Säger v Dennemeyer Equally applicable rules. - First was established
rules should [1991]. The German law on patent renewal services reserved
be necessary the right to operate this service.
and It consisted of sending out reminders that patents
proportionate were about to expire and deals with the renewal
to the desired process to patent agents and lawyers.
objective. A UK company provided this to clients throughout EU
and especially Germany.
Operated lawfully in UK but did not comply with
requirements of German law.
A German competitor Sager brought an action against
the UK Company from operating in Germany.
Court held that there should be elimination of
discrimination against nationality AND abolition of
rules and restrictions, even if its non-discriminatory if it
impedes activities of a service provider established in
another Member state where he lawfully provides
similar services.
The court further held that non-discrimination should
be justified by:
1. Imperative reasons relating to public health.
2. Interest is not already protected by the home
state
3. Necessary and proportionate.
Services and Cross Border Activity
