TAIEX Seminar onthe Directive on Services in the Internal Market

Warsaw, 31.03.2008

Simplification and modernization of the regulatory framework

Sophie Malétras

Freedom of Establishment • Simplification of authorisation schemes

– justification for overriding reasons of general interest, screening + report to Commission, – transparency, – simplification (validity for the entire territory, tacit authorisations, etc)

• Requirements to be eliminated (black list - Art.14)– discriminations,– prohibitions on having establishments in other MS,– economic tests and involvement of competing operators in authorisations, etc

• Requirements to be evaluated against proportionality and overriding reasons of general interest (grey list - Art.15) screening + report to Commission:

– quantitative and territorial restrictions,– fixed tariffs,– reserve of activities,– specific legal form,– capital of companies, etc

Authorisation schemes- Identification and evaluation of authorisation

scheme -• Authorisation schemes constitute by their very

nature a severe restriction to the freedom of establishment, as consistently recognized by the case law of the Court of Justice.

• Wide notion of authorisation scheme (Art. 4 (6) of the Directive: "any procedure under which a provider or a recipient is in effect required to take steps in order to obtain from a competent authority a formal decision, or an implied decision, concerning access to a service activity, or the exercise thereof.")

Authorisation schemes- Review -

• Authorisation schemes as one of the most common formalities applied to service providers

• Obligation for MS to review their authorisation schemes all authorisation schemes relating to access to or exercise of a service activity do not apply to those aspects of authorisation schemes which are governed by other Community instruments

• Art 9-13 establish a number of general principles for the review and adaptation of those authorisation schemes

• Art. 9.2 obliges Member States to identify existing authorisation schemes.

• MS need to screen authorisation schemes at all levels (national, regional, local) as regards their existence.

• As a result of the screening, a number of schemes might need to be removed.

• Those retained must be non-discriminatory, justified by an overriding reason of public interest and proportional.

Screening under Art. 39.1 Art. 9 - authorisations

• Particular attention to be paid to proportionality of the existence of an authorisation scheme.

• A legitimate public interest can often be effectively safeguarded by a less restrictive measure than an authorisation scheme such as a posteriori controls or a simple declaration by the provider.

Screening under Art. 39.1 Art. 9 – authorisations

• MS have to report on existence of authorisation schemes together with reasons why they consider that those comply with the conditions of non-discrimination, justification by an overriding reason of public interest and proportionality.

• No need to report on aspects of authorisation schemes which are governed directly or indirectly by other Community instruments.

Screening under Art. 39.1 Art. 9 – authorisations

Authorisation schemes - conditions for granting an authorisation -

• Autorisation schemes shall be based on criteria precluding any arbitrary decision

• The criteria shall be:– Non discriminatory– Justified by an overriding reason of general interest– Proportionate– Clear and unambiguous– Objective– Transparent and accessible– Made public in advance

• Non duplication of requirements and controls

Autorisation schemes- The duration of authorisations -

• General principle of unlimited duration of authorisations

• Possible exceptions to this general principle

– When the limitation in time can be justified by an overriding reason of general interest

– When the number of available authorisations is limited by an overriding reason of general interest

Authorisation schemes- Procedures -

• The territorial scope• Limitations to the number of authorisations• Procedures based on objective, transparent

rules to ensure impartiality• Authorisation procedures need to be carried out

within reasonable period• Mechanism of tacit authorisation• The obligation to state reasons and the right of

appeal

Regulatory framework Requirements to be eliminated

(“black list” - Art.14)

• List of prohibited establishment requirements : “black list” Already condemned by the ECJ

• MS have to remove them from their legislation for all service activities covered by the Services Directive

• MS prevented from newly introducing such requirements in the future

Regulatory framework -Prohibited requirements I -

• Discriminations based directly or indirectly on nationality

– Nationality– residence

• Prohibition on having establishments in other MS,

– Prohibition of requirements limiting the establishment of service providers to one MS,

– Prohibition of requirements limiting the choice of the service provider between principal and secondary establishment

• Prohibition of conditions of reciprocity

Regulatory framework -Prohibited requirements II -

• Prohibition of economic tests• Prohibition of the involvement of

competing operators in authorisations• Prohibition of obligations to obtain financial

guarantees or insurances from operators established in the same MS

• Prohibition of obligations to have been previously exercised the activity in the MS.

Regulatory frameworkRequirements to be evaluated

« grey list » - article 15 -• List of requirements to be evaluated against

proportionality and overriding reasons of general interest • Depending on the outcome of the evaluation

– MS will need to abolish requirements which are non justified and proportionate

– MS will need to replace requirements not proportionate by less restrictive means compatible with the provisions of the SD

– MS can maintain requirements complying with conditions set out in the SD

• Screening process subject to a report to Commission• On the basis of Article 15(6), any new legislation

introducing requirements listed in Article 15 will have to justified and proportionate and will have to be notified to the Commission.

Screening under Art. 39.1 Art. 15 – establishment requirements (III)

• MS have to report on requirements that they intend to maintain together with reasons why they consider that those comply with the conditions of non-discrimination, justification by an overriding reason of public interest, and proportionality.

• Report has to cover also requirements which have been abolished or made less stringent.

Regulatory framework- Requirements to be evaluated -

• Quantitative and territorial restrictions,• Obligation for the service provider to take a specific legal

form• Requirements relating to the shareholding of a company• Bans on having more than one establishment in the

territory of the same MS• Obligation to have a minimum number of employees• Obligations to apply fixed minimum or maximum tariffs• Obligations to supply other specific services jointly with

his service

Thank you for your attention

Sophie MalétrasEuropean Commission

DG Internal Market and Servicessophie.maletras@ec.europa.eu