Freedom Of Services Notes

EU Law: freedom of services

• Freedom to provide services (FTPS)—governed by Art 56 and 62 TFEU.

Relationship between freedom of establishment (Art 49); and freedom to provide services (Art 56)

• In many respects, FTPS is the counterpart to FoE: applies to same entities, echoes many of same principles governing both; even shares some of same provisions.

• Content of treaty provisions is similar; and ECJ has interpreted them in similar ways.

• However, key difference-temporal character: FTPS differs from FOE in a key respect: establishment entails a permanent present; but provision of services entails only a temporary presence, or no presence at all.

Article 56

• Applies to:

  • Self-employed persons (defined in Jany, actually a case relating to FTPS) same as for FoE.

  • Companies & Firms (Art 62 applying Art 54 to all matters covered by FTPS)

    • (though Art 56 makes clear: the provider of services must already have a place of establishment within the EU, and must be a national of a MS).

• Prohibits:

  • Restrictions on Freedom to provide services.

• Includes:

  • Right to receive services (Van Binsbergen).

• The general right in Art 56 supplemented by Art 59 TFEU: which provides for directives to be issued for the purpose of liberalising a particular service.

• And the power to issue directives for mutual recognition of professional qualifications is also made applicable to FTPS by Art 62 applying Art 53 TFEU.

Art 54, direct effect (Van Binsbergen)

• Similar issues to Freedom of Establishment under Art 49 explored by ECJ in Reyners, re unconditionally.

• Unconditional?: similar issues to FOE under Art 49. Original EEC Treaty gave right of FTPS under Art 56 conditional upon a programme being drawn up to abolish restrictions to the freedom, and directives being enacted to implement the programme (Art 59 opening words: ‘within the framework of the provisions set out below’). Treaty of Rome 1957 placed an obligation on the Council, acting on proposals from the Commission, to draw up a general programme for abolition of restrictions on FTPS. Seemed to make the implementation of FTPS conditional upon the enactment of positive legislative measures.

  • This seemed to make the right incapable of fulfilling the ‘unconditional’ requirement of Van Gend.

  • However, Treaty also provided for the abolition of restrictions to FTPS to be completed by end of the transition period. The deadline had passed, without that objective being achieved.

• ECJ in Van Binsbergen v Bestuur: Art 56 capable of having direct effect since the end of the transition period, at which date restrictions on FTPS should have been abolished.

What constitutes a service? (Art 56 only applies to services)

• (1) Duration

• Services differ from ‘establishment’ under Art 49: services can be temporarily pursue activity in MS (Art 57): a person providing may, to do so, temporarily pursue the activity in the MS (Art 57) where the service is provided.

• i.e. must maintain a temporary presence in the MS to provide a service there.

• i.e. temporary presence OR no physical presence in MS of service.

• So if there’s a permanent presence in a MS—Art 49, FOE, applies; if only temporarily presence, or no presence at all, then Art 56, FTPS, applies

• Not just about ‘duration’: a presence in a MS, can manifest itself in a variety of ways, and patterns of presence & absence may be more complex.

• So Gebhard (re distinguishing service from establishment), degree of temporality determined in light of:

  • Duration

  • Regularity

  • Periodicity

  • Continuity.

• (2)-2^nd requirement for a ‘service’, remuneration

  • Remuneration, Art 57: Services = those ‘normally provided for remuneration’.

  • However, remuneration need not be paid by the person receiving the service, can be paid by a 3^rd party (Deliege).

  • Deliege v Ligue Francophone de Judo, re Belgian judo competitor, re rules for partaking in international competitions:

  • Concerned a Belgian judo competitor. She complained she was being improperly prevented by Belgian judo authorities from taking part in international competitions.

  • Belgian judo authorities argued: Art 56 did not apply, because she was an amateur competitor .

  • ECJ disagreed. HELD: EC rejected argument that Art 56 could not apply because she was an amateur.

  • Held: sporting activities fall within Art 56, even if some services are not paid for by those for whom they are performed. The remuneration can be paid by a 3^rd party:

  • by participating in sporting events, amateur athletes allow the organisers of the events to sell tickets, to sell broadcast rights, and advertising; in turn, the athletes themselves may be paid by their sponsors.

• (3) 3^rd requirement (Steymann)—‘Genuine and effective economic activity’, not merely one which is marginal or ancillary (Steymann). Same as for workers.

  • An activity pursued for remuneration will be regarded as an economic one (Steymann).

  • Thus, in HM Customs & Excise v Schindler (1994), ECJ held that lotteries are an economic activity, as they are services provided for remuneration constituted by the price of the ticket, and remuneration = economic activity (from Steymann).

  • [[several MSs had argued that lotteries are not a service, as are controlled by public authorities in the public interest, and have no economic purpose since are based on chance—ECJ rejected this argument.]]

Examples of services

• Art 57 outlines 4 types of service coming under Art 56:

  • (a) Industrial activities

  • (b) Commercial activities

  • (c) Craftsmen

  • (d) Professionals

• Other examples, this list not exhaustive, ECJ broad approach:

  • Abortions (Grogan)

    • Society for Protection of Unborn Children v Grogan (1991): HELD: the medical termination of a pregnancy, performed for remuneration in accordance with law of MS, = a service.

    • Case arose from proceedings in Ireland, where abortions are prohibited by the constitution, to prevent the officers of student associations from distributing info to students re location of abortion clinics in UK.

    • ECJ refused to engage in an...

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