FREE MOVEMENT OF SERVICES AND THE RIGHT OF ESTABLISHMENT IN THE EU

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FREE MOVEMENT OF SERVICES AND THE RIGHT OF
ESTABLISHMENT IN THE EU

• Prof. dr.sc. Iris Goldner Lang
• Faculty of Law, University of Zagreb
• igoldner_at_pravo.hr

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• Article 49 TFEU
• restrictions on the freedom of establishment of
  nationals of a Member State in the territory of
  another Member State shall be prohibited. Such
  prohibition shall also apply to restrictions on
  the setting-up of agencies, branches or
  subsidiaries by nationals of any Member State
  established in the territory of any Member State.
• Freedom of establishment shall include the right
  to take up and pursue activities as self-employed
  persons and to set up and manage undertakings, in
  particular companies or firms within the meaning
  of the second paragraph of Article 54, under the
  conditions laid down for its own nationals by the
  law of the country where such establishment is
  effected

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• Articles 56 and 57 TFEU
• Art. 56(1) restrictions on freedom to provide
  services within the Union shall be prohibited in
  respect of nationals of Member States who are
  established in a Member State other than that of
  the person for whom the services are intended.
• Art. 57(1) concept services where they are
  normally provided for remuneration, in so far as
  they are not governed by the provisions relating
  to freedom of movement for goods, capital and
  persons.
• Art. 57(3) the person providing a service may,
  in order to do so, temporarily pursue his
  activity in the Member State where the service is
  provided, under the same conditions as are
  imposed by that State on its own nationals.

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Notes

1. What is prohibited? - Art. 49 56 talk about
   restrictions and same conditions
2. Does Art. 49 give right only to EU citizens in a
   MS other than the MS of their nationality?
3. Does free movement of services apply only to the
   movement of service provider?
   (cross-border element)
4. Direct effect
5. Subsidiary nature

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• Restrictions
• Interpretation of Art. 49 56 TFEU
• Originally interpreted as mainly prohibiting a MS
  from discriminating individuals or companies
  from other MSs
• ?
• More recently, the CJ has held that Art. 49 and
  56 prohibit any national measures which hinder or
  make less attractive the exercise of the right of
  establishment and free movement of services.
• ? discrimination approach ? obstacle approach
• market access test

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• Restrictions and
• Justified Limitations
• Gebhard (C-55/94)
• Measures liable to hinder or make less attractive
  the exercise of fundamental freedoms guaranteed
  by the Treaty must fulfil four conditions
• They must be applied in a non-discriminatory
  manner
• They must be justified by imperative requirements
  in the general interest
• They must be suitable for securing the attainment
  of the objective which they pursue
• They must not go beyond what is necessary in
  order to attain it

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Establishment v. Services

• Establishment v services permanent v temporary
• Establishment stable and continuous basis on
  which the economic or professional activity is
  carried on
• Service - performance of economic activities on a
  temporary basis - duration,regularity,periodicity
  and continuity
• Example a bank with an office in another MS
  establishment, not services
• A bank which sells a product in another MS over
  the internet services
• The fact that the provision of services is
  temporary does not mean that the provider of
  services may not equip himself with some form of
  infrastructure in the host MS (including an
  office, chambers or consulting rooms) in so far
  as such infrastructure is necessary for the
  purposes of performing the services in question.

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Restriction

• Same principle as Cassis de Dijon
  non-discriminatory measures are caught
• all measures liable to hinder or make less
  attractive the exercise of fundamental freedoms
  to prohibit, impede, make less attractive
• Again emphasis on market access
• Basic issue to draw the line between what
  effectively restricts market access and what does
  not

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• Imperative Requirements
• Examples
• Protection of workers (Rush Portuguesa)
• Consumer protection (Schindler)
• Maintenance of order in society (Schindler)
• Good reputation of financial sector(Alpine
  Investment)
• Preservation of national historical and artistic
  heritage (C-180/89 Commission v. Italy)
• Protection of recipients of services (Van
  Wesemael)
• Protection of intellectual property (Coditel)
• ...

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• 3) Free Movement of Services
• Who Moves -Cross-Border Element
• (1) Service provider (MS 1) ? Service recipient
  (MS 2)
• (2) Service provider (MS 1) ? Service recipient
  (MS 2)
• (186/87 Cowan)
• service
• (3) Service provider (MS 1) ? Service recipient
  (MS 2)

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4) Direct Effect

• Vertical direct effect of Art. 49 - 2/74 Reyners
• 36/74 Walrave and Koch (para. 17)
• Prohibition of such discimination does not
  apply to the action of public authorities, but
  extends likewise to rules of any other nature
  aimed at regulating in a collective manner
  gainful employment and the provision of services
• C-438/05 Viking (para. 65)
• There is no indication in that case-law that
  could validly support the view that it applies
  only to associations or to organisations
  exercising a regulatory task or having
  quasi-legislative powers.

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Viking Line - Facts

• Viking is a Finnish ferry operator
• Suffers from Estonian competition Finnish wages
  too high
• Seeks to reflag the Rosella, to conclude new
  collective agreement with trade unions
• Finnish trade union and International Transport
  Federation take collective action
• Viking relies on the right of establishment

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Viking Line - Held

• Trade union collective action not outside scope
  of Treaty provisions on establishment
• Right to take collective action is a fundamental
  right (see also Charter), but can be limited
• Balance must be struck collective action
  justified in so far as jobs or conditions of
  employment are jeopardised or under serious
  threat

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Thank You!

• http//www.pravo.unizg.hr/EJP/nastavnici__faculty/
  iris_goldner_lang
• igoldner_at_pravo.hr