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Europaudvalget 2005-06
EUU Alm.del INFO-note I 43
Offentligt

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 4.4.2006

COM(2006) 160

PROVISIONAL VERSION

2004/0001 (COD)

Amended proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on services in the internal market

(presented by the Commission)

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EXPLANATORY MEMORANDUM

The Commission presents an amended proposal for a Directive of the European Parliament

and of the Council on services in the internal market. The amended proposal incorporates

those amendments proposed by the European Parliament in first reading which are acceptable

to the Commission as well as many of the clarifications which have been discussed by the

Council. It also fully respects the European Council conclusions, stressing the need to make

the internal market for services fully operational, while preserving the European social model.

ACKGROUND

The Commission adopted its proposal on 13 January 2004. It was formally transmitted to the

European Parliament and to the Council on 6 February 2004.

The Committee of the Regions gave its opinion on 29 September 2004 and the European

Economic and Social Committee gave its opinion on 9 February 2005. The European

Parliament adopted a legislative resolution at its first reading on 16 February 2006, and

proposed amendments to the Commission proposal.

IM OF THE

OMMISSION PROPOSAL

Improve the basis for economic growth and employment in the EU.

The proposal is part

of the process of economic reform launched by the Lisbon Strategy. As services account for

the bulk of the EU economy, competitive services markets are essential for economic growth.

At present, a wide range of Internal Market barriers prevent many service companies,

especially SMEs, from growing across national borders and fully benefiting from the Internal

Market. This also undermines the global competitiveness not only of EU service providers,

but also of the EU manufacturing sector, which increasingly relies on high quality services. It

also makes Europe a less attractive place for foreign investment.

Achieve a genuine Internal Market in services by removing legal and administrative

barriers to the development of service activities.

Those barriers arise both when service

providers from one Member State wish to establish themselves in another Member State and

when they wish to provide a service from their Member State of establishment into another

Member State, for example by moving to the other Member State on a temporary basis. The

proposal seeks to facilitate the exercise of these two fundamental freedoms enshrined in the

EC Treaty – the freedom of establishment and the freedom to provide services- and to give

service providers greater legal certainty.

Strengthen the rights of consumers as users of services.

The consumer demand for cross-

border services is not being met due to considerable legal and administrative difficulties and a

lack of information on, and of trust and confidence in, services from other Member States.

The proposal will address these problems by imposing obligations on Member States to

remove restrictions on the use of cross-border services, by applying the principle of non-

discrimination and by requiring greater transparency and information from services providers.

Establish legally-binding obligations for effective administrative co-operation between

Member States.

Efficient and well-functioning administrative co-operation is essential to

making the Internal Market work properly. Regulatory authorities in Member States have

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little knowledge of, and therefore little trust in, the legal framework and supervision in other

Member States. This results in duplication of rules and controls for cross-border activities and

can also be used by rogue traders to avoid supervision or to circumvent applicable national

rules, with the consequent risk for users of services. The proposal establishes legal obligations

of information exchange and mutual assistance between Member States, underpinned by an

effectively-functioning electronic information system which will allow competent authorities

to easily identify their relevant interlocutors in other Member States and to communicate with

one another.

3.1.

PINION OF THE

OMMISSION ON THE

UROPEAN

ARLIAMENT

S AMENDMENTS

Scope of application and other general provisions (Articles 1-4)

Services of General Interest. Amendments 13, 44, parts of 72 and 289,

relating to Articles

1 and 2 and corresponding recitals, make clear that

Services of General Economic Interest

are included in the scope of application of the Directive, but that the Directive does not

provide for their liberalisation or for the privatisation of public entities providing such

services, nor does it deal with their funding or with state aids.

Amendment 73

clarifies in

Article 2 that

Services of General Interest

fall outside the scope of the Directive. The

Commission agrees with amendments 44, relevant parts of 72 and 289. The Commission also

accepts amendments 13 and 73, however, it slightly redrafts the text of amendment 73

(Article 2) as well as the text of amendment 13 (new Recital 7a) explaining that –subject to

explicit exclusions of certain specific sectors –

Services of General Economic Interest

fall

within the scope of application of the Directive because these services are of an economic

nature.

Healthcare services. Amendment 78

excludes from the scope of application both private and

public healthcare services, adding the corresponding modification in Article 2.

Amendment

304

specifies in Recital 10c that this exclusion covers healthcare and pharmaceutical services

provided by regulated health professionals to patients to assess, maintain or restore their state

of health.

Amendments 233/403

explain in Article 1 that the Directive does not affect public

healthcare services or access to public funding by healthcare providers.

Amendment 305

adds a new Recital 10d explaining that the Directive does not affect the reimbursement of the

costs of healthcare provided in another Member State and stresses that this issue should be

addressed in another legal instrument in order to achieve greater legal certainty and clarity.

The Commission accepts the exclusion of healthcare services from the scope of application

and confirms its commitment to come forward with a specific initiative on health services.

Therefore, amendments 78, 304 and 305 are accepted. Amendments 233/403 on public

healthcare have become obsolete due to the overlapping with the definition in Article 2.

Social services. Amendment 292,

states, in Article 1, that the Directive does not affect

services pursuing social welfare objectives and

amendment 252,

relating to Article 2,

excludes social services such as social housing services, childcare and family services from

the scope of the directive.

Amendments 294

and

296

provide for two new recitals which

explain the nature of social services and, in particular, of social housing, childcare and support

to families.

Amendment 295

introduces a recital which specifies that the Directive does not

deal with the funding of, or aids linked to, social housing or with the criteria or conditions set

by Member States for social housing services. Furthermore,

amendment 10

adds, in another

recital, that the Directive does not concern requirements governing access to public funds, for

example for social services. The Commission is of the opinion that any exclusion from the

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Directive must be clearly defined so as to ensure increased legal certainty and to avoid

diverging interpretations in Member States. Accordingly, the Commission redrafts the

definition of amendment 252 (Article 2) and merges amendments 294 and 296 in a new

Recital 10h, in order to specify that the exclusion from the directive concerns those social

services relating to social housing, childcare and support to families and persons in need

which, because of their interest for society, are either provided by the State, or by providers

mandated by the State, with the objective of ensuring support to those who are in a particular

state of need. It follows that amendment 292 becomes redundant. The text of amendment 295

is redrafted to clarify that it concerns social services in general and not only social housing.

Amendment 10 is accepted in its entirety.

Amendment 232

highlights the specific social role

of non-profit sport activities. It is accepted and inserted in new Recital 16a, subject to

redrafting to ensure the legal coherence of the text.

Other sectorial exclusions and full exclusion of taxation. Amendments 300 and 302/332

concern Article 2 and exclude respectively

temporary work agencies

and

security services

from the scope of the directive. Corresponding recitals, added by

amendments 301 and 303,

underline that the rules applicable to these sectors should be fully harmonised.

Amendment

excludes

legal services

to the extent they are governed by other Community instruments.

Amendment 79, 80 and 81,

relating to Article 2, and

amendments 16, 17 and 18,

on the

corresponding recitals, exclude from the scope of application

audiovisual services -

regardless of their mode of production, distribution and transmission-

gambling activities,

and

professions connected with the exercise of official authority,

notaries in particular. The

Commission accepts the exclusion of services of temporary work agencies and private

security services provided by amendments 300 and 302/333. However, the need for full

harmonisation for temporary work agencies and security services has not been proved and, as

a consequence, amendments 301 and 303 cannot be accepted. The Commission does not

accept amendment 77 on the exclusion of legal services; this is not required given that Article

3 already provides that in case of conflict between the provisions of the Services Directive

and a provision of another Community instrument governing specific aspects of the services

activity the provision of the latter will prevail. With regard to audiovisual services, the

Commission accepts the exclusion provided by amendment 79 and has redrafted amendment

19 (new Recital 10e) to align it with the amendment to the article and to clarify that the

Directive does not apply to aids granted in the audiovisual sector which are covered by

Community rules on competition. The Commission also accepts in spirit the exclusion of

gambling services but redrafts the texts of amendments 17 and 80 in order to limit it clearly to

gambling activities as such . The Commission accepts only in part amendments 19 and 82,

regarding professions connected with the exercise of official authority and brings the wording

of the exclusion into line with the precise limits set out by Article 45 of the EC Treaty, which

provides for a derogation from the freedom of establishment and the freedom to provide

services for specific activities which involve direct and specific participation in the exercise of

official authority, and not for whole professions as such.

The Commission accepts the full exclusion of

taxation

provided by

amendments 82,

Article 2, and

amendment 19

(Recital 11).

Amendments 14, 15, 20, 74, 75 and 306

concern sectorial exclusions (in Article 2 and

correspondent recitals) originally proposed as

regards financial services, electronic

communication services and transport services

but provide additional clarification. The

Commission can accept amendments 14, 15, 20, 74 and 306 in their entirety or subject to

redrafting to ensure the legal coherence of the text (see Article 2 and Recitals 9, new 10a, new

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10b), but cannot accept Amendment 75, because Recital 10a already contains the relevant

explanation on telecommunications services.

Specific areas of law. Amendment 298

clarifies in article 1, the relationship of the Directive

with

fundamental rights

as recognised in the Member States and by the Charter of

Fundamental Rights, and

amendment 299

introduces a new recital stipulating that the

Directive should be interpreted in such a way as to reconcile the exercise of fundamental

rights with the fundamental freedoms laid down in Articles 43 and 49 of the Treaty.

Amendment 8

clarifies that the Directive fully respects Community initiatives based on

Article 137 of the Treaty concerning the promotion of employment and improved living and

working conditions.

Amendment 297,

relating to Article 1, and

amendment 9,

relating to the

corresponding recital, state that the Directive shall not apply to or affect

labour law

i.e. any

legal or contractual provision concerning employment conditions, working conditions,

including health and safety at work, and the relationship between employers and workers, and

that it shall fully respect the relations between social partners including the right to industrial

action and not affect social security legislation of the Member States.

Amendments 290,

relating to Article 1,

and 291

(recital) state that the Directive should not affect rules of

criminal law. Amendments 7

and part of

amendment 72

clarify, both in a recital and in the

text of Article 1, that the Directive does not affect measures taken by Member States, in

accordance with Community law, in relation to the

protection or promotion of cultural and

linguistic diversity and media pluralism.

The Commission accepts, in relation to

fundamental rights issues, amendment 298, subject to redrafting to ensure the legal coherence

of the text, and amendment 299, in its entirety. Concerning labour law, the Commission

agrees that the Directive does not affect labour law as set out in Amendment 297, including

the right to take industrial action as well as Member States' social security law. However, in

order to ensure the legal coherence of the text and to improve clarity and ease of

understanding, the Commission streamlines the texts of Amendments 297 and 298 so that

labour law is addressed by Article 1, paragraph 6 and the issue of fundamental rights

including rights regarding collective agreements by Article 1, paragraph 7. With regard to

criminal law, the Commission accepts amendment 290 stating that the Directive does not

affect criminal law provisions, as well as amendment 291 (new recital 6e) subject to

redrafting in order to further clarify that criminal law rules should not be misused to

circumvent the rules laid down in the Directive. Concerning protection or promotion of

cultural and linguistic diversity and media pluralism, the Commission accepts amendment 7 in

its entirety and redrafts the relevant part of amendment 72 to ensure the legal coherence of the

text. Finally, the Commission accepts in its entirety Amendment 8 (new Recital 6f).

Relationship of the Directive with other provisions of Community law. Amendments 83

and 21

address this issue, in Article 3 and corresponding Recital 13. The Commission accepts

further clarification contained in Amendment 83 that the Directive does not override other

Community instruments and that in the event of a conflict with other Community instruments

governing specific aspects of access to and exercise of a services activity, the provisions of

those specific aspects in such instruments shall prevail. In order to ensure overall consistency

of the text and to bring the work of the European Parliament and the Council closer together,

the Commission has added additional clarifications (Recitals 13a and 13b). In addition,

amendments 307 and 219

(merged with amendment 83) states that this Directive is without

prejudice to private international law, in particular, private international law governing

contractual and non-contractual obligations, and explain the effect for consumer protection

rules. The Commission accepts amendment 307 and amendment 219 subject to minor

redrafting to make the reference to consumer protection legally sound.

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Definitions (Article 4). Amendments 23 to 26, 39, 84 to 90, 308, 92 to 98

relate to the

definitions of the terms contained in the text of the Directive (see Article 4 and corresponding

recitals). The Commission accepts amendments 25-26, 93-94 and 97-98 in their entirety and

amendments 23-24 subject to minor redrafting and merging them. In addition, the

Commission accepts amendments 39, 84, 88 to 90, 95 and 308, in principle, but has redrafted

them in order to make the text consistent with the Community

acquis

or with the scope of the

Directive. However, the Commission cannot accept amendments 85 and 86. Amendment 96,

on the definition of "worker", is also redundant in relation to the re-defined scope of

application and is not accepted. Amendment 92, with regard to the notion of "competent

authorities", and amendment 87, on the notion of "provider" are not accepted for reasons of

clarity and coherence of the text with the Community

acquis.

Finally the Commission cannot

amendment 22,

deleting the exemplificative list of services covered by the Directive

contained in Recital 14. This recital is useful to clarify the Directive and it is thus reinstated,

with minor drafting modifications to reflect the new scope of application. In addition, in order

to draw on the useful additional clarification provided by the Council, the Commission has

completed Recital 18a (amendment

25)

and Recital 20a and added new Recital 18b.

The Commission accepts in their entirety or subject to minor redrafting,

amendments 1 to 3,

5, 6, 11,

which relate to recitals describing the general objectives of the Directive, and its non

interference with the internal allocation of powers within the Member States, but cannot

amendment 4.

3.2.

Administrative simplification (Articles 5-8)

Simplification of procedures (Article 5). Amendment 99

transforms section 1 of the

Chapter on the right of establishment for service providers in a distinct new Chapter on

"Administrative Simplification".

Amendment 27

clarifies that the rules relating to

administrative procedures do not aim at harmonising national administrative law, but rather at

the removal of overly burdensome elements which hinder the freedom of establishment.

Amendment 100

states, in Article 5, that Member States shall examine (the verb

'authenticate' used in the amendment does not seem accurate) and if appropriate simplify the

procedures and formalities applicable to access to, and exercise of, a service activity. In

addition, it introduces an obligation for Member States, "in conjunction with the

Commission", to introduce harmonised European forms (the same flows from

amendment

29)

and adds a list of existing Community legislation to which Article 5(1a) and (2) shall not

apply. Amendment 100 also explains that Member States’ right to require

“non-certified"

translations of documents in their official languages is not affected.

Amendment 30

stresses

that formal requirements, such as presentation of original documents including certified

translations, cannot be imposed unless justified by an overriding reason relating to the public

interest. The Commission accepts amendments 99, 27 and 29-30 in their entirety and

amendment 100 in principle, subject to redrafting necessary to make the text legally coherent

and to draw on the work at the Council. In particular, the Commission text makes it clear that

the establishment of European forms will be carried out according to the comitology

procedure and adds a new Recital (22b) which suggests a number of parameters that Member

States may take into account while examining the need for simplifying procedures and

formalities.

Points of single contact (Article 6). Amendment 102

explains that, in cases where a

pro

forma

registration is required, it must be available by electronic means at the points of single

contact.

Amendment 103

requires the Commission to co-ordinate points of single contact by

establishing a European point of single contact.

Amendment 104

clarifies that the creation of

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points of single contact is without prejudice to the allocation of functions and powers among

authorities within national systems.

Amendment 309

sets out a new timetable for the

establishment of points of single contact.

Amendment 310

stipulates that it should also be

possible to complete all procedures and formalities necessary for the supervision of

compliance with Directive 96/71/EC at these points. The Commission accepts amendments

309 and 104 and furthermore clarifies in new Recital 25a, reflecting the work in the Council,

that the fee that points of single contact may charge should be proportionate to the cost of

procedures and formalities. However, the Commission cannot accept amendment 102 since

pro forma

registration with the points of single contact would be an unnecessary

administrative burden. The Commission cannot accept amendment 103 either, because a

European point of single contact would represent an unnecessary administrative structure and

would be contrary to the principle of subsidiarity (since administrative cooperation can be

best dealt with by Member States themselves). Amendment 310 cannot be accepted because

reference to the supervision of compliance with Directive 96/71/EC, which is not affected in

any way by the present proposal, is inappropriate.

Right to information (Article 7). Amendment 105

makes it clear that the right to

information only concerns means of redress generally available.

Amendments 31, 106 and

110

clarify that the obligation for competent authorities to provide assistance does not cover

legal advice in individual cases; that the obligation to provide information can be fulfilled by

making it accessible through a website; that advice could include a step-by-step guide; and

that information shall be provided in plain and intelligible language.

Amendment 107

states

that information and assistance should be accessible, inter alia, at a distance and by electronic

means.

Amendment 108

sets out a deadline for implementation of information obligations

and

amendment 109

clarifies that the availability of the information in other languages has to

be compatible with Member States' legislation on the use of languages.

Amendment 33,

introducing a new recital, reinforces the provisions in Article 7. The Commission accepts

amendments 105-106, 108-110, 31, 33 and, in line with the work of the Council, adds in

amendment 31 (Recital 25c), that issues such as liability for incorrect or misleading

information are for Member States to determine. On the other hand, the Commission cannot

accept amendment 107 since it would remove the obligation to provide information by

electronic means, which is an essential tool for making administrative simplification a reality.

Procedures by electronic means (Article 8). Amendment 111

sets out a revised timetable

for implementation, explains that the procedures and formalities may be easily completed,

inter alia, by electronic means (as does

amendment 32)

and that electronic procedures should

not apply to cases when original documentation can be requested. The Commission cannot

accept amendment 111, apart from the revised timetable, or amendment 32 because, as

mentioned above, electronic procedures are an essential measure of administrative

simplification and they can also be used for original documentation since proof of authenticity

can be provided by electronic authentication. However, the Commission deems it fit to clarify

on the basis of amendment 32 (Recital 26), which draws on the work of the Council, that the

obligation to provide for procedures by electronic means does not prevent Member States

from offering other means, in addition to electronic ones, to complete procedures and

formalities.

3.3.

Freedom of establishment for providers (Articles 9-15)

Authorisation schemes. Amendment 35

clarifies in Recital 27c that the provisions of the

Directive dealing with authorisation schemes concern neither decisions by authorities to set

up a public or private entity nor the conclusion of contracts by authorities.

Amendment 37

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indicates that overriding reasons relating to the public interest such as public health may

justify the application of authorisation schemes and other restrictions to social services, on

condition that the principles of non-discrimination, necessity and proportionality are

respected.

Amendments 112-113

reorganise and rename the Chapter and the Section

respectively.

Amendment 116

(as well as amendment

209)

excludes authorisation schemes

from the mutual evaluation process. The Commission accepts amendments 35, 112-113 in

their entirety and amendment 37 subject to minor drafting changes. On the other hand, the

Commission cannot accept amendments 116 and 209 because the obligation to evaluate and

report on authorisation schemes is an essential measure for facilitating the access to and the

exercise of service activities. However, the Commission specifies in a new Recital (27d), in

accordance with the work in the Council, that the reporting obligation concerns only the

existence of authorisation schemes and not the criteria and conditions for the granting of an

authorisation. As regards

amendments 114, 115 and 117,

which contain mainly technical

changes, the Commission accepts amendment 115 and amendment 117, subject to redrafting

necessary for legal coherence. However, the Commission cannot accept amendment 114,

which would make the text less clear.

Conditions for granting of authorisation. Amendments 34 and 121

stipulate that the

authorisation should normally cover the entire national territory except if a more limited

geographical scope is justified by an overriding reason relating to the public interest, such as

environmental protection.

Amendments 34

and

123

provide that local and regional

competencies in the granting of authorisations are not affected by the Directive.

Amendment

119

adds "transparency" and "accessibility" to the criteria with which authorisation schemes

must comply.

Amendment 120

clarifies that, in assessing whether the conditions for granting

an authorisation are equivalent or essentially comparable to those to which the provider is

already subject in another Member State (non-duplication), not only their objective and

purpose but also their effect and the effectiveness of their enforcement need to be considered.

Amendment 122

excludes decisions to grant an authorisation from the requirement to state

reasons and to provide for means of redress before the courts.

Amendment 118

deletes the

word 'objective' from the phrase "justified by an overriding reason relating to the public

interest" in Article 10. The Commission accepts amendments 34, 118, 119 and 123 in their

entirety. As far as amendment 120 is concerned, acceptance is coupled by the insertion of a

new Recital (27g): this aims to clarify that the requirement of non-duplication does not

prevent Member States from applying their own conditions but merely require them to take

into account equivalent conditions already satisfied by the provider in another Member States.

In addition, the Commission agrees with the substance of amendment 121, but opts for a

different wording. On the other hand, the Commission cannot accept amendment 122 because

the exclusion of decisions to grant an authorisation from the obligation to state reasons is

capable of rendering judicial review of an administrative decision, in particular for third

parties, less effective or even virtually impossible.

Duration of authorisation. Selection from among several candidates. Amendments 128

and 36

state that Member States' ability to revoke authorisations, especially when conditions

for their granting are no longer met, is not affected.

Amendments 124-127, 129, 38 and 30

provide useful clarifications in Article 11 and corresponding recitals.

Amendment 130

provides that Member States may take into account, in applying their selection procedure, a

number of public interest objectives. The Commission accepts amendments 128 and 36,

limited to situations where conditions for granting of the authorisation are no longer met. In

addition, the Commission accepts amendments 124-127, 129, 38 in their entirety and

amendments 130 and 30 subject to minor drafting adjustments.

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Authorisation procedures. Amendment 134 and 28

delete the rule according to which in

the absence of a response within the set time limit, the authorisation shall be deemed to be

granted ("tacit authorisation").

Amendment 135

states that an acknowledgement of receipt

for applications should only be provided at the request of the applicant and does not need to

specify the available means of redress.

Amendments 131-133 and 136-137

contain technical

clarifications which the Commission can accept, subject to minor changes as far as

amendments 136-137 are concerned. On the other hand, the Commission cannot accept

amendments 134 and 28 because tacit authorisation (in the absence of a reply from the

authorities) is key to facilitating the freedom of establishment. However, the Commission

clarifies in a new Recital (28a), in accordance with the work of the Council, that, as regards

tacit authorisation different arrangements may be put in place in respect of certain activities

where they are objectively justified by overriding reasons relating to the public interest.

Likewise, the Commission cannot accept amendment 135, because this would create an

additional burden for the applicants and render judicial review more difficult.

Prohibited requirements (Article 14). Amendment 138

modifies the title of this section.

Amendment 140

(and

41)

clarifies that the prohibition of a case-by-case application of an

economic test does not concern planning requirements which do not pursue economic aims

but serve overriding reasons relating to the public interest.

Amendment 141

clarifies that the

prohibition on involving directly or indirectly competing operators in the granting of

authorisations does not concern the consultation of organisations such as chambers of

commerce on matters other than individual applications.

Amendment 40

provides that in

some cases it may be justified to compel a service provider to be present in person during the

exercise of the activity.

Amendment 142

explains that the prohibition on requiring a financial

guarantee or insurance from a service provider established in a Member State’s territory does

not affect Member States' ability to require financial guarantees as such, or to require that

insurance be taken out from an undertaking with special or exclusive rights, nor that it affects

requirements relating to participation in a collective compensation fund.

Amendment 143

clarifies the requirement of previous registration. The Commission accepts amendments 138,

140, 141, 143 and 41 in full, amendment 40 subject to an additional clarification. The

Commission accepts the spirit of amendment 142, but redrafts the relevant provision to make

it coherent with Community law and added further clarification in new Recital 32a, in line

with the Council's work. In addition, amendment 143 provides for technical clarifications

which the Commission accepts, whilst at the same time providing in a new Recital (32b)

based on the Council's work, further clarification about the prohibition of pre-registration.

Requirements to be evaluated (Article 15). Amendment 42

clarifies that the mutual

evaluation process does not affect the freedom of Member States to set a high level of

protection of the public interest in their legislation and that the evaluation has to take into

account the specificity of Services of General Economic Interest and of the particular tasks

assigned to them, which might justify certain restrictions on the freedom of establishment.

Amendments 144 and 145

remove examples of requirements concerning the provider's legal

form or the shareholding of the company.

Amendments 147/242

exclude from the evaluation

process requirements concerning selling below cost and sales.

Amendments 149/242

deletes

the word 'objectively' from the phrase "justified by an overriding reason relating to the public

interest"

Amendments 148/242

(as well as amendment

43)

exclude "must-carry" obligations

from the evaluation process. Likewise,

amendment 150

excludes Services of General

Economic Interest and social insurance schemes from Article 15, paragraphs 1 to 4. In

addition, amendment 150, together with

amendment 151,

removes the prohibition on

Member States to introduce any new requirement of a similar kind unless these fulfil the

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criteria of non-discrimination, necessity and proportionality, and the corresponding obligation

of Member States to notify such new laws, regulations or administrative provisions.

Amendment 146

adds a reference to the Professional Qualification Directive. The

Commission accepts amendments 42, 147 and 148/149/242. The Commission also accepts the

deletion of examples from the relevant articles as in amendments 144 and 145. The

Commission also adds in Recital 34, in line with the work of the Council, a clarification that

the evaluation of requirements imposing minimum and/or maximum tariffs only concerns

tariffs imposed by competent authorities for the provision of certain services, whereas it does

not concern general rules on price determination such as for the renting of houses. The

Commission accepts in principle amendment 150 relating to Services of General Economic

Interest and it specifies that paragraphs 1 to 4 of Article 15 only apply to legislation in the

field of Services of General Economic Interest in so far as the application of such rules does

not obstruct the performance, in law or in fact, of the particular task assigned to them

Deletion of the notification obligations (amendment 151) would seriously water down the

evaluation process and therefore cannot be accepted. Finally, amendments 146, 148 and

149/242 propose technical changes which the Commission accepts (as far as 146 is

concerned, however, reference is made to the Professional Qualification Directive as a whole

and not to its Title II only).

3.4.

Freedom to provide services and derogations (Articles 16-19)

Freedom to provide services (Article 16). Amendment 152

(concerning the title of the

Chapter) and

amendment 293/rev4

(concerning Article 16) replace the former country of

origin principle by a provision on the freedom to provide services. Amendment 293/rev4

confirms the right of service providers to provide a service in a Member State other than the

one where he is established and obliges the Member State where the service is provided to

ensure free access to and free exercise of the service activity within its territory. Paragraph 1

of Article 16 additionally stipulates that the Member State where the service is provided

cannot apply its own national requirements to service providers established in another

Member State unless these are justified on grounds of public policy, public security, public

health or the protection of the environment, they are non-discriminatory, necessary and

proportionate. Paragraph 3 again confirms the possibility of Member States provided for in

paragraph 1 to impose their national rules where they are justified on grounds of public

policy, public security, public health or the protection of the environment on service providers

from other Member States moving into its territory. Paragraph 3 also clarifies that Member

States, in conformity with Community law, are not prevented from applying their

employment conditions. Article 16 paragraph 2 establishes a list of requirements, such as a

requirement to have an establishment in the territory in order to be allowed to provide a

service, which Member States may not impose on service providers established in other

Member States. Amendment 293/rev4 also provides that the Commission, after consultation

of the Member States and the social partners, shall submit a report on the application of

Article 16 including consideration of the need to propose harmonising measures.

The Commission accepts amendments 152 and 293/rev4 subject to minor drafting adjustments

in paragraph 3 clarifying that – in accordance with the jurisprudence of the ECJ – national

requirements always have to be non-discriminatory, necessary and proportionate. The

Commission also accepts – subject to drafting adjustments – amendment 45 on Recital 37,

indicating that Member States can impose their requirements which are indispensable for

reasons of public policy, public security, public health and the protection of the environment

as well as amendments 46-47 which delete recitals referring to the former country of origin

principle. Furthermore, the Commission, in accordance with the work of the Council, adds

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further explanatory recitals, one recital referring to the jurisprudence of the ECJ on the right

of Member States to take measures in order to prevent service providers from abusively

taking advantage of the Internal Market principles (Recital 37a), another recital stressing the

necessity of ensuring that providers are able to take equipment which is an integral part of the

provision of the service with them when providing services in another Member State (Recital

39a) as well as one additional recital explaining the concept of equipment (Recitals 39 b).

Additional derogations from the freedom to provide services (Article 17). Amendment

400

renames Article 17 and stipulates that the provision on the freedom to provide services

shall not apply to

Services of General Economic Interest

provided in another Member State,

inter alia to postal services, electricity, gas and water distribution, waste water services and

the treatment of waste. The Commission accepts amendment 400.In addition, the Commission

clarifies, based on the work of the Council, in a Recital (40a) that the derogation for postal

services covers both activities reserved to the universal service provider and other postal

services. Furthermore, amendment 165 clarifying the derogation in Article 17 point 12 for the

authorisation regime provided for in Articles 3 and 4 of Council Regulation (EEC) No 259/93

on the supervision and control of shipments of waste within, into and out of the European

Union, can also be accepted.

Concerning activities of

lawyers and notaries, amendment 160

deletes the derogation for

matters covered by Council Directive 77/279/EEC to facilitate the effective exercise by

lawyers of the freedom to provide services and

amendment 166

deletes the derogation for

acts requiring by law the involvement of a notary. These amendments become obsolete given

that the Commission does not accept a general exclusion of the activities of lawyers of or

notaries from the scope of application of the Directive. These derogations should therefore be

maintained. Concerning the judicial recovery of debts,

amendment 161

introduces a new

derogation which can be accepted by the Commission. At the same time the Commission

clarifies in a new recital (40b) in line with the Council work, the scope of this derogation.

Concerning

requirements which reserve an activity to a particular profession,

amendment 162/404

adds – in addition to the derogation concerning matters covered by Title

II of Directive 2005/36/EC on the recognition of professional qualifications – a new

derogation. Amendment 162/404 as well as amendment 48 which explains this new

derogation in a recital (41c) can be accepted in principle subject to redrafting to make its

wording more precise.

Concerning the

free movement of persons and their residence, amendment 163

clarifies

the derogation relating to Directive 2004/38/EC and can be accepted.

Concerning the

derogation for the movement of third country nationals in the context of

the provision of a service, amendment 164

reformulates the wording of the derogation

contained in Article 17 point 11. Since Article 25 has been deleted, the derogation in Article

17 point 11 had to be further reworded.

Amendments 50 and 51

which introduce Recitals

41a and 41b providing explanations on the derogation for the Posting of Workers Directive

are accepted subject to minor drafting changes.

Concerning

specific prohibitions and specific requirements justified by reasons relating

to public policy, public security, public health or the protection of the environment,

amendments 167 and 168

provide for modifications of the derogations contained in Article

17 point 16 and 17. In the Commission's view these amendments are obsolete since, as a

consequence of the fact that Article 16 now gives Member States in more general terms the

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possibility to impose national requirements relating to public policy, public security, public

health and the protection of the environment, the more specific derogations in Article 17 point

16 and 17 have become superfluous. Consequently they are deleted together with the

corresponding recitals.

Concerning

reimbursement of hospital care, amendment 169

deletes the derogation for the

authorisation system applicable to the reimbursement of hospital care. In line with the

exclusion of health services from the scope of application and the deletion of Article 23 on the

assumption of health care costs, the Commission accepts amendment 169.

Concerning

private international law, amendment 170

introduces in Article 17 a derogation

for all provisions of private international law, particularly those dealing with contractual and

non-contractual obligations, including the form of contracts. The Commission accepts this

amendment which is required in Article 17 because the provision on the freedom to provide

services is the provision of this Directive that could possibly conflict with the application of

rules of private international law.

Amendments 171, 172 and 173

delete the derogations for

consumer contracts, formal validity of contracts relating to immovable property and the non-

contractual liability of the provider in case of an accident which are now covered by the

broader derogation for all provisions of private international law. The Commission accepts

these amendments as well as the corresponding changes in the Recitals (amendments

53 and

relating to Recitals 45 and 46).

In addition, the Commission has added technical clarifications reflecting the work of the

Council.

Transitional derogations (Article 18). Amendment 174

fully deletes Article 18 containing

transitional derogations from the (former) country of origin principle. The Commission

accepts this because gambling activities have been excluded from the scope of application of

this Directive, the access to the activity of judicial recovery of debts is covered by a new

derogation in Article 17 point 7a and transport of cash and valuables has been included in

Article 40(1).

Case-by-case derogations (Article 19). Amendment 175

adapts the title in line with the new

renamed Article 16.

Amendment 176

refers to the conditions under which the case-by-case

derogation can be taken and removes the obligation to comply first with the mutual assistance

procedure before taking such measures. The case-by-case derogations relating to public health

and public policy and to the exercise of health professional have become obsolete due to the

exclusion of healthcare from the scope of application of the Directive and due to the fact that

Article 16 now allows Member States in more general terms to impose requirements relating

to public policy and public health. The Commission therefore deletes the corresponding case-

by-case derogations and limits Article 19 to the safety of services. However, the Commission

cannot accept the deletion of the mutual assistance procedure which is essential to ensure that

this derogation does not lead to unnecessary restrictions to the freedom to provide services.

3.5.

Rights of recipients of services (Articles 20-23)

Prohibited restrictions/Non-discrimination. Amendments 177 and 55,

relating to Article

21 and Recital 50 state that the recipient of services should not be made subject to

discriminatory requirements based "solely" on his nationality or place of residence. The

Commission cannot accept this addition to the non discrimination clause set out in Article 21,

because this could be interpreted as allowing discrimination if they are based also on other

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grounds. The rest of amendment 55 clarifies Recital 50 and can be accepted. In addition, the

Commission adds some clarifications in line with the Council's work concerning the concept

of financial assistance mentioned in Article 20 (see Recital 48 and new Recital 48a).

Assistance for recipients. Amendment 178,

concerning Article 22, on the assistance for

recipients of services clarifies a number of points on information and advice given by the

points of single contact to recipients. In addition this amendment deletes the contact points of

the European Consumer Centres Network from those associations and organisations whose

contact details recipients should be informed of and who could provide practical assistance.

Amendment 179

adds a new Article 22a concerning the possibility for a service provider to

complete all procedures and formalities with the points of single contact. The Commission

accepts amendment 178, except the part which deletes the reference to European Consumer

Centres Network, which, for the Commission, should play a particularly active role in giving

practical assistance to consumers. The Commission cannot accept amendment 179 and the

provision of a new Article 22a, given that role and responsibilities of single points of contacts

are already sufficiently dealt with in the Chapter of the Directive on administrative

simplification.

Reimbursement of healthcare received in another Member State. Amendments 56 to 62

and 180/247

delete Article 23, the provisions dealing with the reimbursement of healthcare

received in another Member State, and corresponding recitals. The Commission accepts these

deletions and, as mentioned above, it will come forward with a separate initiative on health

services.

3.6.

Posting of workers (Articles 24-25)

Specific provisions on posting of workers and posting of third country nationals.

Amendments 181, 182/248, 63-64, 183/249 and 65-66

delete the relevant provisions

regarding the removal of administrative obstacles and regarding obligations of Member States

to cooperate regarding the posting of workers and the posting of third country nationals.

While the Commission believes that it is of high importance to address any undue

administrative burdens which hinder the opportunities for service providers to provide cross-

border services by posting their staff and that it is important to improve administrative

cooperation in order to combat black labour and social dumping, the Commission accepts the

deletion of these provisions as part of an overall compromise. In order to address undue

administrative burdens and to establish a better-functioning system of administrative

cooperation the Commission will provide guidance for Member States on these issues.

3.7.

Quality of services (Articles 26-32)

Information on providers and their services (Article 26). Amendments 184 and 186

set

out a systematic obligation for service providers to make information to be given to recipients

available via the points of single contact.

Amendment 185

introduces an obligation to make

available to the recipients information on the legal form of the service provider. The

Commission accepts amendment 185 subject to minor redrafting. On the contrary, the

Commission cannot accept amendments 184 and 186 because they would create an

unnecessary burden to service providers.

Professional liability insurance (Article 27).

The first sentence of

amendment 187

deletes

the obligation for Member States to ensure that service providers whose services present a

particular risk to the health or safety of the recipient or a particular financial risk to the

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recipient take out professional liability insurance and replaces it by a mere declaration of the

possibility for Member States to require such insurance coverage. The second sentence

specifies that the insurance shall also cover risks presented by such services when they are

provided in other Member States. The Commission accepts both sentences of this amendment

subject to minor drafting adjustments. Furthermore,

amendment 67

adding Recital 63a is

accepted subject to necessary adjustments reflecting the changes in Article 27(1). Recital 63

was adjusted accordingly.

Amendments 188, 189 and 190

are accepted by the Commission

as far as they are necessary and do not create an additional burden for service providers. In

addition, based on the work in the Council, the Commission clarifies the text of Article 27 and

the corresponding Recitals, in particular on the scope of application of this Article, and

addresses the risk of failure of the insurance market by providing for the possibility to

establish a procedure dealing with situations of verifiable failure of the insurance market.

After-sales guarantees (Article 28). Amendment 191

deletes the obligation for service

providers to provide information on the after-sales guarantees they supply.

Amendment 192

deletes the provision clarifying that after-sales guarantees provided for in other Community

instruments should not be affected. The Commission cannot accept amendment 191 because

the relevant information on after-sales guarantees must be provided to recipients by service

providers. Moreover, the Commission cannot accept amendment 192 because the link with

other Community legislation on after-sales guarantees has to be explicitly mentioned.

Commercial communications (Article 29).

The Commission clarifies the text reflecting the

work in the Council, according to which professional rules on commercial communications

must comply with the principles of non-discrimination, necessity and proportionality.

Multidisciplinary activities (Article 30). Amendment 193

(as well as

amendment 210)

excludes multidisciplinary activities from the mutual evaluation process. The Commission

cannot accept amendments 193 and 210 because the obligation to evaluate and report on

restrictions on multidisciplinary activities is an essential measure for facilitating access to, and

exercise of, service activities. The Commission, on the basis of the Council's work, provides

further clarification on what restrictions may be justified and explains this in a new recital

(64a).

Policy on quality of services (Article 31). Amendment 194

clarifies that Member States in

cooperation with the Commission shall encourage the development of voluntary European

standards. The Commission accepts amendment 194, whilst stressing at the same time, on the

basis of the Council's work, the role of consumer associations.

Settlement of disputes (Article 32). Amendment 195

introduces further contact details to be

supplied by providers. Amendment 196 replaces the word 'appropriate' by 'satisfactory'. The

Commission accepts amendments 195 and 196, whilst clarifying at the same time, on the

basis of the Council's work, what equivalent financial guarantees are to be deemed equivalent

within the meaning of this Article explains this in a new recital (65a).

3.8.

Administrative co-operation (Articles 34-38)

Mutual assistance and supervision. Amendments 199 to 202 and amendments 68 to 69

reorganise the chapter on administrative cooperation and clarify the obligations of the

respective Member States. Amendment 199 renames the chapter. Amendments 200-202 aim

to set out more clearly the distribution of tasks between the Member State of establishment

and the Member State where the service is provided. In particular, the Member State of

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establishment is responsible for the supervision of service providers established in its territory

and cannot refuse to take supervisory or implementing measures on the ground that the

service has been provided in another Member State. The Member State of establishment must

carry out checks, inspections and investigations as well as provide information on service

providers established in its territory at the request of another Member State. The Member

State where the service is provided is responsible for the supervision of the activity of the

service provider in its territory with regard to matters in respect of which it can impose its

national requirements in accordance with Article 16 paragraph 1 (Article 21 paragraph 1 in

the consolidated text of the Parliament). In other cases, it shall carry out the checks,

inspections and investigations on the spot when objectively justified and non-discriminatory

or when requested by the Member State of establishment. Amendment 69 explains that

effective administrative co-operation is necessary in order to avoid proliferation of rules

applicable to service providers or duplication of controls for cross-border activities and to

remove the possibility for rogue traders to avoid supervision or circumvent applicable

national rules on services. Amendment 68 sets out the need for a well functioning electronic

information system. The Commission accepts amendments 68-69 in their entirety and

amendments 200-202 in spirit. Recognising the need to set out clearly the tasks and

obligations of the Member State of establishment and the Member State where the service is

provided in order to have effectively working administrative cooperation, the Commission

incorporates the amendments of the European Parliament into the structure drawn up by the

Council.

Alert mechanism. Amendment 203

sets out an alert mechanism, in case a Member State

becomes aware of serious specific acts or circumstances that could cause serious damage to

the health or safety of persons, to inform immediately the Commission and the Member States

concerned. The Commission accepts amendment 203 and has also added the environment to

the reasons which come under the alert mechanism. However, this new system serves a

different purpose than the mutual assistance system in the event of case-by-case derogations

and cannot therefore replace it.

Information on the good repute of providers. Amendment 197

adds that the information

Member States' must supply at the request of a competent authority in another Member State

must be directly relevant to the service provider's competence and that the request itself must

be duly substantiated.

Amendment 198

stipulates that the provisions on information requests

must comply with rules on the provision of personal data and that any information which is

public should be accessible to consumers. The Commission accepts both amendments and

further clarifies, reflecting the work of the Council, that Member States shall supply

information on disciplinary or administrative actions or criminal sanctions and decisions

concerning insolvency or bankruptcy, in conformity with their national law; that the sanctions

and actions shall only be communicated where a final decision has been taken; and that the

provisions on the good repute of providers do not pre-empt initiatives in the area of police and

judicial co-operation in criminal matters (new Recital 66f).

Accompanying measures. Amendment 68

describes the need for a well-functioning

electronic information system to improve administrative cooperation between Member States.

The Commission acceps amendment 68, transfers its contents to an Article and explains this

in a new recital (66g). Moreover, the Commission, reflecting the work of the Council,

introduces another accompanying measure for the exchange of officials in charge of the

implementation of mutual assistance.

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3.9.

Convergence programme and final provisions (Articles 39-48)

Codes of conduct (Article 39).

Amendments 205 and 70 stress the importance of codes of

conducts at Community level drawn up, in particular, by professional bodies, organisation and

associations, and clarify that the codes of conducts are complementary to Member States'

legal requirements.

Amendment 71

moves into a recital the description of the areas which

should be included in the codes of conduct. The Commission accepts these amendments and

adds, reflecting the work of the Council, a new recital (67b) which describes the objective of

the codes of conduct.

Additional harmonisation (Article 40).

In line with the redefined scope,

amendment 206

deletes gambling activities and

amendment 208

deletes other subjects from matters for

possible additional harmonisation, such as those identified through the case-by-case

derogations or the mutual evaluation procedure.

Amendment 207

adds security services to

the list of subjects to be assessed for additional harmonisation. The Commission accepts

amendments 206, 208 and 207, while specifying that an assessment of the possibility of

additional harmonisation for security services and transport of cash and valuables will be

made, one year after the date of implementation of the Directive.

In addition, the Commission accepts

amendments 211-212

which concern the date when the

Commission shall present the report on mutual evaluation and the review clause.

Finally,

amendment 213

sets out a 3-year deadline for the transposition of the Directive into

Member States' laws. Due to the urgency of advancing the Internal Market for services, the

Commission considers that 2-year deadline for transposition should be preserved.

MENDED PROPOSAL

Pursuant to Article 250(2) of the EC Treaty, the Commission amends its proposal as described

above.

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2004/0001 (COD)

Amended proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on services in the internal market

(presented by the Commission)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular the first

and third sentence of Article 47(2) and Articles 55, 71 and 80(2) thereof,

Having regard to the proposal from the Commission

Having regard to the opinion of the European Economic and Social Committee

Having regard to the opinion of the Committee of the Regions

Acting in accordance with the procedure referred to in Article 251 of the Treaty,

Whereas:

(1)

The European Union is seeking to forge ever closer links between the States and

peoples of Europe and to ensure economic and social progress. In accordance with

Article 14(2) of the Treaty, the internal market comprises an area without internal

frontiers in which the free movement of services and the freedom of establishment are

ensured. The elimination of obstacles to the development of service activities between

Member States is essential in order to strengthen the integration of the peoples of

Europe and to promote balanced and sustainable economic and social progress.

eliminating such barriers it is essential to ensure that the development of service

activities contributes to the fulfilment of the task laid down in Article 2 of the Treaty

of promoting throughout the Community a harmonious, balanced and sustainable

development of economic activities, a high level of employment and of social

protection, equality between men and women, sustainable and non-inflationary

growth, a high degree of competitiveness and convergence of economic

performance, a high level of protection and improvement of the quality of the

environment, the raising of the standard of living and quality of life, and economic

and social cohesion and solidarity among Member States.

A competitive market in services is essential in order to promote economic growth

and create jobs in the EU. At present numerous barriers within the internal market

COM(2004) 2, 13.1.2004.

OJ C 221, 8.9.2005, p. 113.

OJ C 43, 18.2.2005, p. 18.

(1a)

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prevent service providers, particularly small and medium-sized enterprises (SMEs),

from extending their operations beyond their national borders and from taking full

advantage of the internal market. This weakens the worldwide competitiveness of

EU service providers. A free market which compels the Member States to eliminate

restrictions on cross-border provision of services while at the same time increasing

transparency and the information for consumers would give consumers wider

choice and better services at lower prices.

(2)

The report from the Commission on "The State of the Internal Market for Services"

drew up an inventory of a large number of barriers which are preventing or slowing

down the development of services between Member States, in particular those

provided by SMEs, which are predominant in the field of services. The report

concludes that a decade after the envisaged completion of the internal market, there is

still a huge gap between the vision of an integrated European Union economy and the

reality as experienced by European citizens and service providers. The barriers listed

affect a wide variety of service activities across all stages of the service provider’s

activity and have a number of common features, including, in particular, the fact that

they often arise from administrative burdens, the legal uncertainty associated with

cross-border activity and the lack of mutual trust between Member States.

Since services constitute the engine of economic growth and account for 70% of GDP

and employment in the majority of Member States, this fragmentation of the internal

market has a negative impact on the entire European economy, in particular on the

competitiveness of SMEs

and the movement of workers,

and prevents consumers

from gaining access to a greater variety of competitively priced services.

It is

important to point out that the services sector is a key employment sector for women

in particular, and that they therefore stand to benefit greatly from new opportunities

offered by the completion of the internal market for services.

The European

Parliament and the Council have emphasised that the removal of legal barriers to the

establishment of a genuine internal market is a matter of priority for achieving the goal

set by the Lisbon European Council of

improving employment and social cohesion

and achieving sustainable economic growth so as to make

the European Union the

most competitive and dynamic knowledge-based,

employment-boosting

economy in

the world by 2010. Removing those barriers,

while ensuring an advanced European

social model, is thus a basic condition for overcoming the difficulties encountered in

implementing the Lisbon Strategy and for reviving

the European economy,

particularly in terms of employment and investment.

It is therefore important to

achieve an internal market for services, with the right balance between market

opening and preserving public services and social and consumer rights.

It is therefore necessary to remove barriers to the freedom of establishment for service

providers in Member States and barriers to the

free movement of

services as between

Member States and to guarantee

recipients and providers

the legal certainty necessary

for the exercise in practice of those two fundamental freedoms of the Treaty. Since the

barriers in the internal market for services affect operators who wish to become

established in other Member States as well as those who provide a service in another

Member State without being established there, it is necessary to enable service

providers to develop their service activities within the internal market either by

(3)

(4)

COM(2002) 441.

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becoming established in a Member State or by making use of the

free movement of

services. Service providers should be able to choose between those two freedoms,

depending on their strategy for growth in each Member State.

(5)

Those barriers cannot be removed solely by relying on direct application of Articles 43

and 49 of the Treaty, since, on the one hand, addressing them on a case-by-case basis

through infringement procedures against the Member States concerned would,

especially following enlargement, be extremely complicated for national and

Community institutions, and, on the other hand, the lifting of many barriers requires

prior coordination of national legal schemes, including the setting up of administrative

cooperation. As the European Parliament and the Council have recognised, a

Community legislative instrument makes it possible to achieve a genuine internal

market for services.

This Directive establishes a general legal framework which benefits a wide variety of

services while taking into account the distinctive features of each type of activity or

profession and its system of regulation. That framework is based on a dynamic and

selective approach consisting in the removal, as a matter of priority, of barriers which

may be dismantled quickly and, for the others, the launching of a process of

evaluation, consultation and complementary harmonisation of specific issues, which

will make possible the progressive and coordinated modernisation of national

regulatory systems for service activities which is vital in order to achieve a genuine

internal market for services by 2010. Provision should be made for a balanced mix of

measures involving targeted harmonisation, administrative cooperation,

the provision

on the freedom to provide services

and encouragement of the development of codes of

conduct on certain issues. That coordination of national legislative regimes should

ensure a high degree of Community legal integration and a high level of protection of

general interest objectives, especially protection

of consumers,

which is vital in order

to establish mutual trust between Member States.

This Directive also takes into

account other general interest objectives, including the protection of the

environment, public security and public health as well as of the need to comply with

labour law.

Since the objectives of the proposed action, namely the elimination of barriers to the

freedom of establishment for service providers in the Member States and to the free

provision of services between Member States, cannot be sufficiently achieved by the

Member States and can therefore, by reason of the scale of the action, be better

achieved at Community level, the Community may adopt measures, in accordance

with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance

with the principle of proportionality, as set out in that Article, this Directive does not

go beyond what is necessary to achieve those objectives.

It is appropriate that the provisions of this Directive concerning the freedom of

establishment

and the free movement of services

should apply only to the extent that

the activities in question are open to competition, so that they do not oblige Member

States

either to liberalise services of general economic interest or to privatise public

entities which provide such services or

to abolish existing monopolies

for other

activities or certain distribution services.

This Directive does not concern requirements governing access to public funds for

certain service providers. Such requirements include notably those laying down

(6)

(6a)

(6b)

(6c)

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conditions under which service providers are entitled to receive public funding,

including specific contractual conditions, and in particular quality standards which

need to be observed as a condition to receive public funds, for example for social

services.

(6d)

This Directive does not interfere with Member States' measures taken, in

accordance with Community law, in relation to the protection or promotion of

cultural and linguistic diversity and media pluralism, including the funding thereof.

This Directive aims at creating a legal framework to ensure the freedom of

establishment and the free movement of services between the Member States and

does not harmonise or prejudice criminal law. Therefore, rules of criminal law will

generally not be affected by this Directive. However, it should not be possible for a

Member State to circumvent the rules laid down in this Directive and to restrict the

freedom to provide services by applying criminal law provisions which specifically

affect the access to or the exercise of a service activity(6f) It is equally important

that this Directive fully respects Community initiatives based on Article 137 of the

Treaty with a view to achieving the objectives of Article 136 of the Treaty

concerning the promotion of employment and improved living and working

conditions.

This Directive does not affect terms and conditions of employment, including

maximum work periods and minimum rest periods, minimum paid annual holidays,

minimum rates of pay as well as health, safety and hygiene at work, nor does it

affect relations between social partners, including the rights to negotiate and

conclude collective agreements, the right to strike and to take industrial actions, nor

does it apply to services provided by temporary work agencies. This Directive does

not affect the social security legislation of the Member States.

This Directive should be interpreted in such a way as to reconcile the exercise of

fundamental rights as recognised in the Member States and by the Charter of

Fundamental Rights of the European Union with the fundamental freedoms laid

down in Article 43 and 49 of the Treaty. Those fundamental rights include i.a. the

right to take industrial action. This Directive should be interpreted in such a way as

to give full effect to those fundamental rights and the fundamental freedoms.

This Directive concerns only service providers established in a Member State and

does not cover external aspects. It does not concern negotiations within

international organisations on trade in services, in particular in the framework of

GATS.

(6e)

(6g)

(6h)

(6i)

[Recital 7 deleted]

(7a)

This Directive covers only services which are performed for an economic

consideration. Services of general interest are not covered by the definition in

Article 50 of the Treaty and therefore do not fall within the scope of this Directive.

Services of General Economic Interest are services that are performed for an

economic consideration and therefore do fall within the scope of this Directive.

However, certain Services of General Economic Interest, such as those that may

exist in the field of transport, are excluded from the scope of application of this

Directive and certain other services of general economic interest, for example, that

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may exist in the area of postal services, are derogated from the provision on the

freedom to provide services.

This

Directive does not deal with the funding of services

of general economic interest and does not apply to systems of aids granted by

Member States, in particular in the social field, in accordance with Community

rules on competition. This Directive does not deal with the follow-up to the

Commission White Paper on services of general interest.

[Recital 8 moved]

(9)

Financial services should be excluded from the scope of this Directive since

theose

activities are subject of specific

Community legislation

aimed, as is this Directive, at

achieving a genuine internal market for services.

Consequently, this exclusion covers

all financial services such as banking, credit, insurance, including reinsurance,

occupational or personal pensions, securities, investment, funds, payments,

investment advice, including the services listed in Annex I to Directive 2000/12/EC

of the European Parliament and of the Council of 20 March 2000 relating to the

taking up and pursuit of the business of credit institutions

In view of the adoption in 2002 of a package of legislative instruments relating to

electronic communications networks and services, as well as to associated resources

and services, which has established a regulatory framework to facilitate access to those

activities within the internal market, notably through the elimination of most

individual authorisation schemes, it is necessary to exclude issues dealt with by those

instruments from the scope of this Directive.

(10)

(10a) The exclusions from the scope of application regarding matters of electronic

communications services as covered by Directives 2002/19/EC

, 2002/20/EC

2002/21/EC

, 2002/22/EC

and 2002/58/EC

of the European Parliament and of the

Council should apply not only to questions specifically dealt with in these Directives

but also to matters for which the Directives explicitly leave to Member States the

possibility of adopting certain measures at national level.

(10b) Transport services,

including urban transport, taxis, and ambulances as well as port

services

are excluded from the scope of this Directive.

(10c) The exclusion of healthcare covers healthcare and pharmaceutical services provided

by health professionals to patients to assess, maintain or restore their state of health

where those activities are reserved to a regulated health profession in the Member

State in which the services are provided.

(10d) This Directive does not affect the reimbursement of healthcare provided in a

Member State other than that in which the recipient of the care is resident. This

issue has been addressed by the Court of Justice on numerous occasions, and the

OJ L 126, 26.5.2000, p. 1. Directive as last amended by Commission Directive 2004/69/EC (OJ L 125,

28.4.2004, p. 44).

OJ L 108, 24.4.2002, p. 7.

OJ L 108, 24.4.2002, p. 21.

OJ L 108 24.4.2002, p. 33.

OJ L 108, 24.4.2002, p. 51.

OJ L 201, 31.7.2002, p. 37.

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Court has recognised patients' rights.. It is important to address this issue in another

Community legal instrument in order to achieve greater legal certainty and clarity to

the extent that this issue is not already addressed in Regulation (EEC) No 1408/71

on the coordination of social security systems

(10e) Audiovisual services, whatever their mode of transmission, including within

cinemas, should also be excluded from the scope of this Directive. Furthermore, the

Directive does not apply to aids granted by Member States in the audiovisual sector

which are covered by Community rules on competition.

(10f) Gambling activities, including lottery and betting transactions, should be excluded

from the scope of this Directive, in view of the specific nature of these activities,

which entail implementation by Member States of policies relating to public policy

and consumer protection.

(10g) This Directive is without prejudice to the application of Article 45 of the Treaty

concerning notably certain activities, of notaries and of other professions, related to

the power of authentication and certification.

(10h) This Directive does not cover those social services in the area of housing, childcare

and support to families and persons in need provided by the State or by providers

mandated by the State – at national, regional or local level- with the objective of

ensuring support to those who are in a particular state of need because of their

insufficient family income, total or partial lack of independence or to those who risk

to be marginalised. These services are essential to guarantee the fundamental rights

to human dignity and integrity and are a manifestation of the principles of social

cohesion and solidarity and should not be affected by this Directive.

(10i)

This Directive does not deal with the funding of, or the system of aids linked to,

social services. Nor does it affect the criteria or conditions set by Member States to

ensure that social services effectively carry out a function to the benefit of the public

interest and social cohesion.

In view of the fact that the Treaty provides specific legal bases for taxation matters and

for the Community instruments already adopted in that field, it is necessary to exclude

the field of taxation from the scope of this Directive.

(11)

[Recital 12 moved]

(13)

There is already a considerable body of Community law on service activities.

This

Directive builds on, and thus complements, the Community acquis. Conflicts

between this Directive and other Community instruments have been identified and

are provided for in this Directive, including by means of derogations. However, it is

necessary to provide a rule for any residual and exceptional cases where there is a

conflict between a provision of this Directive and a provision of another Community

instrument. The existence of such a conflict should be determined in compliance

with the rules of the Treaty on the right of establishment and the free movement of

OJ L 149, 5.7.1971, p. 2. Regulation as last amended by Regulation (EC) No 647/2005 (OJ L 117,

4.5.2005, p. 1).

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services. A conflict between a provision of the Directive and a future Community

instrument should be avoided in the drafting and negotiation of such an instrument.

(13a) This Directive is consistent with and does not affect Directive 2005/36/EC

on the

recognition of professional qualifications. It deals with questions other than those

relating to professional qualifications, for example professional liability insurance,

commercial communications, multidisciplinary activities and administrative

simplification. Concerning temporary cross-border service provision a derogation

from the provision on the freedom to provide services in this Directive ensures that

Title II on the free provision of services of Directive 2005/36/EC on the recognition

of professional qualifications is not affected. Therefore, none of the measures

applicable in the Member State where the service is provided under the Directive on

the recognition of professional qualifications is affected by the provision on the

freedom to provide services.

(13b) This Directive is consistent with other Community initiatives concerning services,

particularly those relating to the safety of services. It is also consistent with other

initiatives concerning the internal market, and those concerning consumer protection,

such as Directive 2005/29/EC of the European Parliament and of the Council of 11

May 2005 on unfair commercial practices

and Regulation (EC) No 2006/2004 of the

European Parliament and of the Council of 27 October 2004 on cooperation between

national authorities responsible for the enforcement of consumer protection laws ("the

Regulation on consumer protection cooperation")

(14)

The services covered by this directive concern a wide variety of ever-changing

activities, including business services such as management consultancy, certification

and testing; facilities management, including office maintenance; advertising;

recruitment services; and the services of commercial agents. The services covered are

also services provided both to businesses and to consumers, such as legal or fiscal

advice; real estate services such as estate agencies; construction, including the services

of architects; distributive trades; the organisation of trade fairs; car rental; travel

agencies. Consumer services are also covered, such as those in the field of tourism,

including tour guides; leisure services, sports centres and amusement parks; and,

to the

extent that they are not excluded from the scope of application of the Directive,

household support services, such as help for the elderly. Those activities may involve

services requiring the proximity of provider and recipient, services requiring travel by

the recipient or the provider and services which may be provided at a distance,

including via the Internet.

[Recital 15 deleted]

(16)

According to the jurisprudence of the Court of Justice, the assessment of whether

certain activities, in particular activities which are publicly funded or provided by

public entities, constitute a ‘service’ has to be carried out on a case by case basis in

the light of all their characteristics, in particular the way they are provided,

organised and financed in the Member State concerned. The Court has held that the

OJ L 255, 30.9.2005, p. 22.

OJ L 149, 11.6.2005, p. 22.

OJ L 364, 9.12.2004, p. 1.

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essential characteristic of remuneration lies in the fact that it constitutes

consideration for the services in question and has recognized that

the characteristic

of remuneration is absent in the case of activities performed, for no consideration, by

the State

or on behalf of the State in the context of its duties in the social, cultural,

educational and judicial fields, such as courses provided under the national

education system, or the management of social security schemes which do not

engage in economic activity. The payment of a fee by recipients, for example, a

tuition or enrolment fee paid by students in order to make a certain contribution to

the operating expenses of a system, does not in itself constitute remuneration

because the service is still essentially financed by public funds.

These activities are,

therefore, not covered by the definition

of "service"

in Article 50 of the Treaty and do

not therefore fall within the scope of this Directive.

(16a) Non profit making amateur sporting activities are of considerable social importance.

They often pursue wholly social or recreational objectives. Thus they might not

constitute economic activities within the meaning of Community law and fall outside

the scope of this Directive.

[Recital 17 moved]

(18)

The concept of provider covers any natural person who is a national of a Member State

or any legal person who is engaged in a service activity there, in exercise either of the

freedom of establishment or of the free

movement of

services. The concept of

provider is thus not limited solely to cross-border service provision within the

framework of the

free movement of

services but also covers cases in which an

operator establishes itself in a Member State in order to develop its service activities

there. On the other hand, the concept of a provider does not cover the case of branches

in a Member State of companies from third countries because, under Article 48 of the

Treaty, the freedom of establishment and free movement of services may benefit only

companies constituted in accordance with the laws of a Member State and having their

registered office, central administration or principal place of business within the

Community.

The notion of recipient also covers third country nationals who already

benefit from rights conferred upon them by Community acts such as Regulation

(EEC) No 1408/71

or Directive 2003/109/EC

, Regulation (EEC) No 859/2003

and Directive 2004/38/EC

. Furthermore, Member States have the possibility to

extend the notion of recipient to other third country nationals that are present

within their territory.

Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security

schemes to employed persons and their families moving within the Community (OJ L 149, 5.7.1971,

p. 2).

Council Directive 2003/109/EC of 25 November 2003 concerning the status of third-country nationals

who are long-term residents (OJ L 16, 23.1.2004, p. 44).

Council Regulation (EC) No 859/2003 of 14 May 2003 extending the provisions of Regulation (EEC)

No 1408/71 and Regulation (EEC) No 574/72 to nationals of third countries who are not already

covered by those provisions solely on the ground of their nationality (OJ L 124, 20.5.2003, p. 1).

Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of

citizens of the Union and their family members to move and reside freely within the territory of the

Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC,

68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and

93/96/EEC (OJ L 158, 30.4.2004, p. 77).

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(18a)

The place at which a service provider is established should be determined in

conformity with the case-law of the Court of Justice according to which the concept

of establishment involves the actual pursuit of an economic activity through a fixed

establishment for an indefinite period. This requirement may also be fulfilled where

a company is constituted for a given period or where it rents the building or

installation through which it pursues its activity. It may also be fulfilled where a

Member State grants authorisations for a limited duration only in relation to

particular services. An establishment does not need to take the form of a subsidiary,

branch or agency, but can consist of an office managed by a provider’s own staff or

by a person who is independent but authorised to act on a permanent basis for the

undertaking, as would be the case with an agency. According to this definition

which requires the actual pursuit of an economic activity at the place of

establishment of the service provider, a mere letter box does not constitute an

establishment. In cases where a provider has several places of establishment it is

important to determine from which place of establishment the actual service

concerned is provided. In cases where it is difficult to determine from which of

several places of establishment a given service is provided, this is the place where

the provider has the centre of his activities relating to this particular service.

(18b)

The Treaty provisions on establishment leave economic operators free to choose the

legal form which they deem suitable for carrying out their activity. Accordingly,

"legal persons", within the meaning of the Treaty, means all entities constituted

under, or governed by, the law of a Member State, irrespective of their legal form.

[Recital 19 moved]

(20)

The concept of authorisation scheme covers,

inter alia,

the administrative procedures

for granting authorisations, licences, approvals or concessions, and also the obligation,

in order to be eligible to exercise the activity, to be registered as a member of a

profession or entered in a register, roll or database, to be officially appointed to a body

or to obtain a card attesting to membership of a particular profession. Authorisation

may be granted not only by a formal decision but also by an implicit decision arising,

for example, from the silence of the competent authority or from the fact that the

interested party must await acknowledgement of receipt of a declaration in order to

commence the activity in question or for the latter to become lawful.

(20a) The

notion of

overriding reasons relating to the public interest to which reference is

made in certain provisions of this Directive

has been developed progressively

by the

Court of Justice

in its case-law

in relation to Articles 43 and 49 of the Treaty

and may

continue to evolve. The notion as recognised in the case law of the Court of Justice

covers at least the following grounds: public policy, public security and public

health, within the meaning of Articles 46 and 55 of the Treaty; the maintenance of

order in society; social policy objectives; the protection of the recipients of services;

consumer protection; the protection of workers, including the social protection of

worker;, the preservation of the financial balance of the social security system; the

prevention of fraud; the prevention of unfair competition; the protection of the

environment and the urban environment, including town and country planning; the

protection of creditors; safeguarding the sound administration of justice; road

safety; the protection of intellectual property; cultural policy objectives, including

safeguarding the freedom of expression of various elements, in particular social,

cultural, religious and philosophical values of society; the maintenance of press

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diversity and the promotion of the national language; the preservation of national

historical and artistic heritage and veterinary policy.

[Recital 21 deleted]

(21a)

The rules relating to administrative procedures do not aim at harmonising

administrative procedures but at removing overly burdensome authorisation

schemes, procedures and formalities that hinder the freedom of establishment and

the creation of new services undertakings resulting therefrom.

(22)

One of the fundamental difficulties faced, in particular by SMEs, in accessing service

activities and exercising them is the complexity, length and legal uncertainty of

administrative procedures. For this reason, following the example of certain

modernising and good administrative practice initiatives undertaken at Community

and national level, it is necessary to establish principles of administrative

simplification,

inter alia

through the introduction, coordinated at Community level, of

a system of

points of single contact,

limitation of the obligation of prior authorisation

to cases in which it is essential and the introduction of the principle of tacit

authorisation by the competent authorities after a certain period of time elapsed. Such

modernising action, while maintaining the requirements on transparency and the

updating of information relating to operators, is intended to eliminate the delays, costs

and dissuasive effects which arise, for example, from unnecessary or excessively

complex and burdensome procedures, the duplication of procedures, the red tape

involved in submitting documents, the use of

arbitrary

powers by the competent

authorities, indeterminate or excessively long periods before a response is given, the

limited duration of validity of authorisations granted and disproportionate fees and

penalties. Such practices have particularly significant dissuasive effects on providers

wishing to develop their activities in other Member States and require coordinated

modernisation within an enlarged internal market of twenty-five Member States.

(22a)

Member States should introduce, where appropriate, forms harmonised at

Community level, as established by the Commission, which will serve as an

equivalent to certificates, attestations or any other document in relation to

establishment.

(22b) In order to examine the need for simplifying procedures and formalities Member

States may in particular take into account their necessity, number, possible

duplication, cost, clarity, accessibility as well as the delay and practical difficulties

that they could give rise to for the service provider concerned.

(23)

In order to facilitate access to service activities and the exercise thereof in the internal

market, it is necessary to establish an objective, common to all Member States, of

administrative simplification and to lay down provisions concerning,

inter alia,

points

of single contact,

the right to information, procedures by electronic means and the

establishment of a framework for authorisation schemes. Other measures adopted at

national level to meet that objective may involve reduction of the number of

procedures and formalities applicable to service activities and the restriction of such

procedures and formalities to those which are essential in order to achieve a general

interest objective and which do not duplicate each other in terms of content or

purpose.

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(24)

With the aim of administrative simplification, general formal requirements, such as

presentation of original documents, certified copies or

a certified translation,

should

not be imposed, except where objectively justified by an overriding reason relating to

the public interest, such as the protection of workers,

public health, the protection of

the environment or the protection of consumers.

It is also necessary to ensure that an

authorisation normally permits access to, or exercise of, a service activity throughout

the national territory, unless a new authorisation for each establishment, for example

for each new hypermarket,

or an authorisation that is restricted to a specific part of

the national territory

is objectively justified by an overriding reason relating to the

public interest.

It is appropriate to provide for

points of single contact

in order to ensure that each

provider has a single point at which he can complete all procedures and formalities.

The number of

points of single contact

per Member State may vary according to

regional or local competencies or according to the activities concerned. The creation of

points of single contact

does not interfere with the allocation of functions among

competent authorities within each national system. Where several authorities at

regional or local level are competent, one of them may assume the role of

point of

single contact

and coordinator.

Points of single contact

may be set up not only by

administrative authorities but also by chambers of commerce or crafts, or by the

professional organisations or private bodies to which a Member State decides to

entrust that function.

Points of single contact

have an important role to play in

providing assistance to providers either as the authority directly competent to issue the

documents necessary to access a service activity or as an intermediary between the

provider and the authorities which are directly competent. In its Recommendation of

22 April 1997 on improving and simplifying the business environment for business

start-ups

, the Commission was already encouraging Member States to introduce

points of contact to simplify formalities.

(25)

(25a) The fee which may be charged by points of single contact should be proportionate to

the cost of procedures and formalities with which they deal. This does not prevent

Member States to entrust the points of single contact with the collection of other

administrative fees such as the fee of supervisory bodies.

(25b) Providers and recipients of services must have easy access to certain types of

information. This should include in particular information on procedures and

formalities, contact details of the competent authorities, conditions for access to

public registers and data bases and information concerning available remedies and

the contact details of associations and organisations from which providers or

recipients can obtain practical assistance. This information must be easily

accessible, i.e. it should be available to the public easily and without obstacles. This

information should be provided in a clear and unambiguous manner.

(25c) The obligation for Member States to ensure that relevant information is easily

accessible to providers and recipients can be fulfilled by making this information

accessible through a website. The obligation for competent authorities to assist

providers and recipients does not include the provision of legal advice in individual

cases. Nevertheless, general information on the way in which requirements are

OJ L 145, 5.6.1997, p. 29.

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usually interpreted or applied should be given. The way in which information is

provided to providers and recipients is for each Member State to determine within

the framework of the Directive. Issues such as liability for providing incorrect or

misleading information are for Member States to determine.

(26)

The setting up, in the reasonably near future, of electronic means of completing

procedures and formalities will be vital for administrative simplification in the field of

service activities, for the benefit of providers, recipients and competent authorities. In

order to meet that obligation as to results, national laws and other rules applicable to

services may need to be adapted.

This obligation does not prevent Member States

from providing other means of completing such procedures and formalities, in

addition to electronic means.

The fact that it must be possible to complete those

procedures and formalities at a distance means in particular that Member States must

ensure that they may be completed across borders. The obligation as to results does

not cover procedures or formalities which by their very nature are impossible to

complete at a distance.

Furthermore, this does not interfere with Member States'

legislation on the use of languages.

The possibility of gaining access to a service activity may be made subject to

authorisation by the competent authorities only if that decision satisfies the criteria of

non-discrimination, necessity and proportionality. That means, in particular, that

authorisation schemes should be permissible only where an

a posteriori

inspection

would not be effective because of the impossibility of ascertaining the defects of the

services concerned

a posteriori,

due account being taken of the risks and dangers

which could arise in the absence of a prior inspection. However, the provision to that

effect made by this Directive cannot be relied upon in order to justify authorisation

schemes which are prohibited by other Community instruments such as

Directive 1999/93/EC of the European Parliament and the Council of

13 December 1999 on a Community framework for electronic signatures

, or

Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000

on certain legal aspects of information society services, in particular electronic

commerce, in the internal market ('Directive on electronic commerce')

. The results of

the process of mutual evaluation will make it possible to determine, at Community

level, the types of activity for which authorisation schemes should be eliminated.

(27)

(27a)

This Directive is without prejudice to the possibility for Member States to withdraw

authorisations after they have been issued, if the conditions for the granting of the

authorisation are no longer fulfilled.

(27b) According to the case law of the Court of Justice, public health, consumer

protection, animal health and the protection of the urban environment constitute

overriding reasons relating to the public interest. Such overriding reasons may

justify the application of authorisation schemes and other restrictions applicable to

social services. However, no such authorisation scheme or restriction may

discriminate on grounds of nationality. Further, the principles of necessity and

proportionality must always be respected.

OJ L 13, 19.1.2000, p. 12.

OJ L 178, 17.7.2000, p. 1.

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(27c) The provisions of this Directive relating to authorisation schemes should concern

cases where the access to or exercise of a service activity by economic operators

requires a decision by a competent authority. This concerns neither decisions by

competent authorities to set up a public or private entity for the provision of a

particular service nor the conclusion of contracts by competent authorities for the

provision of a particular service which is governed by rules on public procurement.

(27d) In order to facilitate access to and exercise of service activities, it is important to

evaluate and report on authorisation schemes and their justification. This reporting

obligation concerns only the existence of authorisation schemes and not the criteria

and conditions for the granting of an authorisation.

(

27e)

The authorisation should normally enable the provider to have access to the service

activity, or to exercise that activity, throughout the national territory, except if a

territorial limit is justified by an overriding reason relating to the public interest.

For example, environmental protection may justify the requirement to obtain an

individual authorisation for each installation on the national territory. This

provision does not affect regional or local competences for the granting of

authorisations within the Member States.

(27f) This Directive, and in particular the provisions concerning authorisation schemes

and the territorial scope of an authorisation, do not interfere with the division of

regional or local competences within the Member States, including regional and

local self-government and the use of official languages.

(27g) The provision relating to the non duplication of conditions for the granting of

authorisation does not prevent Member States from applying their own conditions

which are specified in the authorisation scheme. It only requires that competent

authorities, when considering whether these conditions are met by the applicant,

take into account the equivalent conditions which have already been satisfied by the

applicant in another Member State. This provision does not require the application

of the conditions for the granting of authorisation provided in the authorisation

scheme of another Member State.

(28)

In cases where the number of authorisations available for an activity is limited because

of scarcity of natural resources or technical capacity, as may be the position, for

example, with regard to the award of analogue radio frequencies or the exploitation of

hydro-electric plant, a procedure for selection from among several potential candidates

must be adopted, with the aim of developing through open competition the quality and

conditions for supply of services available to users. Such a procedure must provide

guarantees of transparency and impartiality and the authorisation thus granted must

not have an excessive duration, or be subject to automatic renewal, or confer any

advantage on the successful provider. In particular, the duration of the authorisation

granted must be fixed in such as way that it does not restrict or limit free competition

beyond what is necessary to enable the provider to recoup the cost of investment and

to make a fair return on the capital invested.

This provision does not prevent Member

States from limiting the number of authorisations

for reasons other than scarcity of

natural resources or technical capacity.

These authorisations

remain in any case

subject to the other provisions of this Directive relating to authorisation schemes.

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(28a) This Directive provides that failing a response within a time period, authorisation

shall be deemed to have been granted. However, different arrangements may be put

in place in respect of certain activities, where objectively justified by overriding

reasons relating to public interest.

[Recital 29 moved]

(30)

In order to establish a genuine internal market for services, it is necessary to abolish

any restrictions on the freedom of establishment and the free movement of services

which are still enshrined in the laws of certain Member States and which are

incompatible with Articles 43 and 49 of the Treaty respectively. The restrictions to be

prohibited particularly affect the internal market for services and should be

systematically dismantled as soon as possible.

The Court of Justice has consistently held that the freedom of establishment is

predicated, in particular, upon the principle of equal treatment, which entails the

prohibition not only of any discrimination on grounds of nationality but also of any

indirect discrimination based on other grounds but capable of producing the same

result. Thus, access to a service activity or the exercise thereof in a Member State,

either as a principal or secondary activity, may not be made subject to criteria such as

place of establishment, residence, domicile or principal provision of the service

activity.

In certain cases, however, overriding reasons relating to the public interest

may justify compelling a service provider, or one of his employees or a

representative, to be present during the exercise of his activity.

Similarly, a Member

State may not restrict the legal capacity or the right to bring legal proceedings of

companies incorporated in accordance with the law of another Member State on whose

territory they have their primary establishment. Moreover, a Member State may not

confer any advantages on providers having a particular national or local socio-

economic link; nor may it restrict, on grounds of place of establishment, the provider’s

freedom to acquire, exploit or dispose of rights and goods or to access different forms

of credit or accommodation in so far as those choices are useful for access to his

activity or for the effective exercise thereof.

The prohibition of economic tests as a prerequisite for the grant of authorisation

covers economic tests as such, but not requirements which are objectively justified by

overriding reasons relating to the public interest, such as protection of the urban

environment,

social policy and public health objectives.

That prohibition does not

affect the exercise of the powers of the authorities responsible for applying

competition law.

(31)

(32)

(32a) With respect to financial guarantees or insurance, the prohibition of requirements

only concerns the obligation that the requested financial guarantees or insurance

must be obtained from a financial institution established in the Member State

concerned.

(32b) With respect to pre-registration, the prohibition of requirements only concerns the

obligation that the provider, prior to the establishment, be pre-registered for a given

period in a register held in the Member State concerned.

(33)

In order to coordinate the modernisation of national rules and regulations in a manner

consistent with the requirements of the internal market, it is necessary to evaluate

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certain non-discriminatory national requirements which, by their very nature, could

severely restrict or even prevent access to an activity or the exercise thereof under the

freedom of establishment.

This evaluation process is limited to the compatibility of

these requirements with the criteria already established by the Court of Justice on

the freedom of establishment. It does not concern the application of Community

competition law. Where such requirements are discriminatory or not objectively

justified by an overriding reason relating to the public interest or where they are

disproportionate, they must be abolished or amended.

The outcome of this assessment

will be different according to the nature of the activities and the public interest

concerned. In particular, according to the jurisprudence of the Court of Justice, such

requirements could be fully justified when they pursue social policy objectives.

(33a) For the purposes of this Directive, services may only be considered as Services of

General Economic Interest in this directive and without prejudice to Article 16 of

the EC Treaty, if they are provided in application of a special task of public interest

entrusted to the provider by the Member State concerned. This assignment must be

made by way of one or more acts, the form of which is determined by each Member

State, and must specify the precise nature of the special task.

(33b) The mutual evaluation process provided for in this Directive does not affect the

freedom of Member States to set in their legislation a high level of protection of

public interests, in particular of social policy objectives. Furthermore, the mutual

evaluation process has to take fully into account the specificity of services of general

economic interest and of the particular tasks assigned to them. These may justify

certain restrictions on the freedom of establishment, in particular where such

restrictions pursue the protection of public health and social policy objectives and

where they satisfy the conditions in Article 15(3)(a) to (c). For example, concerning

the obligation to take a specific legal form in order to exercise certain services in the

social field, the Court of Justice has already recognised that it may be justified to

submit the service provider to a requirement to be non-profit making.

(34)

The restrictions to be examined include national rules which, on grounds other than

those relating to professional qualifications, reserve access to

certain

activities to

particular providers.

These restrictions also include obligations on a provider to take

a specific legal form, in particular to be a legal person, to be a company with

individual ownership, to be a non-profit making organisation or a company owned

exclusively by natural persons, and requirements which relate to the shareholding of

a company, in particular obligations to hold a minimum amount of capital for

certain service activities or to have a specific qualification in order to hold capital

in, or to manage certain companies. The evaluation of the compatibility of fixed

minimum and/or maximum tariffs with the freedom of establishment concerns only

tariffs imposed by competent authorities specifically for the provision of certain

services and not, for example, general rules on price determination such as for the

renting of houses.

(34a) The mutual evaluation process means that during the transposition period, Member

States will first have to conduct a "screening" of their legislation in order to ascertain

whether above mentioned requirements exist in their legal systems and, at the latest by

the end of the transposition period, Member States must draw up a report on the results

of their screening. Each report will be submitted to all other Member States and

interested parties. Member States will then have six months in which to submit their

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observations on these reports. At the latest by 31 December 2008, the Commission

will draw up a summary report, accompanied where appropriate by proposals for

further initiatives. If necessary the Commission, in cooperation with the Member

States, will assist the Member State in order to design a common methodology.

[Recital 35 deleted]

(36)

The fact that this Directive specifies a number of requirements to be abolished or

evaluated by the Member States during the transposition period is without prejudice to

any infringement proceedings against a Member State for failure to fulfil its

obligations under Articles 43 or 49 of the Treaty.

(36a) This Directive does not concern the application of Articles 28 to 30 of the Treaty

relating to the free movement of goods. The restrictions prohibited pursuant to the

provision on the freedom to provide services

cover the requirements applicable to

access to service activities or to the exercise thereof and not those applicable to goods

as such.

(36b) Where an operator travels to another Member State to exercise a service activity there,

a distinction should be made between situations covered by the freedom of

establishment and those covered, due to the temporary nature of the activities

concerned, by the free movement of services.

As regards the distinction between the

application of the freedom of establishment and the free movement of services

respectively according to the case-law of the Court of Justice the key element is the

question whether the economic operator is established or not in the Member State

where he provides the service concerned. If he is established in the Member State

where he provides his services, he comes under the scope of application of the

freedom of establishment. If by contrast the economic operator is not established in

the Member State where the service is provided, his activities are covered by the free

movement of services.

The Court of Justice has consistently held that the temporary

nature of the activities in question must be determined in the light not only of the

duration of the provision of the service, but also of its regularity, periodical nature or

continuity. In any case, the fact that the activity is temporary does not mean that the

service provider may not equip himself with some forms of infrastructure in the host

Member State, such as an office, chambers or consulting rooms, in so far as such

infrastructure is necessary for the purposes of providing the service in question.

(37)

In order to secure effective implementation of the free movement of services and to

ensure that recipients and providers can benefit from and supply services throughout

the Community regardless of frontiers, it is necessary

to clarify to which extent

requirements of the Member State where the service is provided can be imposed. It is

indispensable to provide that the provision on the freedom to provide services does

not prevent the Member State where the service is provided from imposing, in

compliance with the principles set out in Article 16(1)(a) to (c), its specific

requirements for reasons of public policy or public security or for the protection of

public health or the environment.

The Court of Justice has consistently held that a Member State retains the right to

take measures in order to prevent service providers from abusively taking advantage

of the Internal Market principles. Abuse by a provider must be established on a case

by case basis.

(

37a)

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[Recital 38 deleted]

[Recital 39 deleted]

(39a) It is necessary to ensure that providers are able to take equipment which is integral

to the provision of their service with them when they travel to provide services in

another Member State. In particular, it is important to avoid cases in which the

service could not be provided without the equipment, situations in which service

providers incur additional costs, for example, by hiring or purchasing different

equipment to that which they habitually use or by needing to change significantly

the way they habitually carry out their activity.

(39b) The concept of equipment does not refer to physical objects which are either

supplied by the provider to the client or become part of a physical object as a result

of the service activity such as building materials or spare parts or which are

consumed or left in situ in the course of the service provisions such as combustible

fuels, explosives, fireworks, pesticides, poisons or medicines.

(40)

It is necessary to provide that the

provision on the freedom to provide services

may be

departed from only in the areas covered by derogations. Those derogations are

necessary in order to take into account the level of integration of the internal market or

certain Community instruments relating to services pursuant to which a provider is

subject to the application of a law other than that of the Member State of

establishment. Moreover, by way of exception, measures against a given provider may

also be adopted in certain individual cases and under certain strict procedural and

substantive conditions. In addition, any restriction of the free

movement of

services

should be permitted, by way of exception, only if it is consistent with fundamental

rights which, as the Court of Justice has consistently held, form an integral part of the

general principles of law enshrined in the Community legal order.

(40a) The derogation from the provision on the freedom to provide services concerning

postal services covers both activities reserved to the universal service provider and

other postal services.

(40b) The derogation from the provision on the freedom to provide services relating to the

judicial recovery of debts and the reference to a possible future harmonisation

instrument concerns only the access to and the exercise of activities which consist,

notably, in bringing actions before a Court relating to the recovery of debts.

[Recital 41 moved]

(41a) This Directive should not affect terms and conditions of employment which,

pursuant to Directive 96/71/EC, apply to workers posted to provide a service in the

territory of another Member State. In such cases, Directive 96/71/EC stipulates that

service providers have to comply with terms and conditions of employment in a listed

number of areas applicable in the Member State where the service is provided.

These are: maximum work periods and minimum rest periods, minimum paid

annual holidays, minimum rates of pay, including overtime rates, the conditions of

hiring out of workers, in particular the protection of workers hired out by temporary

employment undertakings, health, safety and hygiene at work, protective measures

with regard to the terms and conditions of employment of pregnant women or

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women who have recently given birth and of children and young people and equality

of treatment between men and women and other provisions on non-discrimination.

This does not only concern terms and conditions of employment which are laid

down by law but also those laid down in collective agreements or arbitration awards

that are officially declared or de facto universally applicable within the meaning of

Directive 96/71/EC. Moreover, this Directive should not prevent Member States

from applying terms and conditions of employment on matters other than those

listed in Article 3 paragraph 1 of Directive 96/71/EC on the grounds of public policy

provisions.

(41b) This Directive should neither affect terms and conditions of employment in cases

where the worker employed for the provision of a cross-border service is recruited in

the Member State where the service is provided. Furthermore, this Directive does

not affect the right for the Member States where the service is provided to determine

the existence of an employment relationship and the distinction between self-

employed persons and employed persons, including "false self-employed persons".

In that respect, according to the case law of the Court of Justice, the essential

characteristic of an employment relationship within the meaning of Article 39 of the

Treaty is the fact that for a certain period of time a person provides services for and

under the direction of another person in return for which he receives remuneration;

any activity which a person performs outside a relationship of subordination must

be classified as an activity pursued in a self-employed capacity for the purposes of

Articles 43 and 49 of the Treaty.

(41c) The provision on the freedom to provide services does not apply in cases where, in

conformity with Community law, in a Member State, an activity is reserved to a

particular profession, for example requirements which reserve legal advice to

lawyers.

[Recital 42 deleted]

[Recital 43 deleted]

(44)

The

derogation

from the

provision on the freedom to provide services

of matters

relating to the registration of vehicles leased in a Member State other than that in

which they are used follows from the case-law of the Court of Justice, which has

recognised

that a Member State may impose such an obligation, in accordance with

proportionate conditions, in the case of vehicles used on its territory. That exclusion

does not cover occasional or temporary rental.

Contractual relations between the service provider and the client as well as between

an employer and employee should not be subject to this Directive. The determination

of the applicable law regarding the contractual or the extra-contractual obligations

of the service provider shall be determined by the rules of private international law.

(45)

[Recital 46 deleted]

(47)

It is necessary to allow Member States the possibility, exceptionally and on a

case-by-case basis, of taking measures which derogate from

the provision on the

freedom to provide services

in respect of a provider established in another Member

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State, on

grounds

of the safety of services. It should be possible to take such measures

only in the absence of harmonisation at Community level.

(48)

Restrictions on the free movement of services, contrary to this Directive, may arise not

only from measures applied to providers, but also from the many barriers to the use of

services by recipients, especially consumers. This Directive mentions, by way of

illustration, certain types of restriction applied to a recipient wishing to use a service

performed by a provider established in another Member State.

Such discriminatory

restrictions include national rules according to which financial assistance

concerning the costs of language or vocational training are limited to cases where

such training is carried out on the territory of the Member State concerned. This

also includes cases where recipients of a service are under an obligation to obtain

authorisation from or to make a declaration to their competent authorities in order

to receive a service from a provider established in another Member State. This does

not concern general authorisation schemes which also apply to the use of a service

supplied by a provider established in the Member State of the recipient.

(48a) The concept of financial assistance provided for the use of a particular service does

not apply to systems of aids granted by Member States, in particular in the social

field or in the cultural sector, which are covered by Community rules on competition

or to general financial assistance not linked to the use of a particular service, for

example grants or loans to students.

(49)

In accordance with the Treaty rules on the free movement of services, as interpreted by

the Court of Justice, discrimination on grounds of the recipient’s nationality or

national or local residence is prohibited. Such discrimination could take the form of an

obligation, imposed only on nationals of another Member State, to supply original

documents, certified copies, a certificate of nationality or official translations of

documents in order to benefit from a service or from more advantageous terms or

prices. However, the prohibition of discriminatory requirements does not preclude the

reservation of advantages, especially as regards tariffs, to certain recipients, if such

reservation is based on legitimate, objective criteria.

Whilst this Directive is not intended to harmonise artificially prices across the

European Union, in particular where market conditions vary from country to

country,

if an internal area without frontiers is to be effectively achieved,

the principle

of non-discrimination imposes that

Community citizens must neither be prevented

from benefiting from a service which is technically accessible on the market, nor be

made subject to different conditions and tariffs by reason of their nationality or place

of residence. The persistence of such discrimination with respect to the recipients of

services highlights, for the Community citizen, the absence of a genuine internal

market in services and, in a more general sense, compromises the integration of the

peoples of Europe. The principle of non-discrimination within the internal market

means that access by a recipient, and especially by a consumer, to a service on offer to

the public may not be denied or hampered by application of a criterion, included in

general conditions made available to the public, relating to the recipient's nationality

or place of residence. It does not follow that it will be unlawful discrimination if

provision were made in such general conditions for different tariffs and conditions to

apply to the provision of a service, where those tariffs, prices, and conditions are

justified for objective reasons

that can vary from country to country,

such as

additional costs effectively incurred because of the distance involved or the technical

(50)

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characteristics of the provision of the service, or different market conditions,

such as

higher or lower demand influenced by seasonality, different vacation periods in the

Member States and pricing by different competitors,

or extra risks linked to rules

differing from those of the Member State of establishment.

(50a) The way in which information is provided to recipients in their Member State of

residence is for that Member State to determine within the framework of this

Directive. Issues such as liability for providing incorrect or misleading information

are for Member States to determine.

[Recital 51 deleted]

[Recital 52 deleted]

[Recital 53 deleted]

[Recital 54 deleted]

[Recital 55 deleted]

[Recital 56 deleted]

[Recital 57 deleted]

[Recital 58 deleted]

[Recital 59 deleted]

[Recital 60 deleted]

[Recital 61 deleted]

(62)

It is appropriate to provide that, as one of the means by which the provider may make

the information which he is obliged to supply easily accessible to the recipient, he is to

supply his electronic address, including that of his website. Furthermore, the

obligation to present certain information in the provider’s information documents

presenting his services in detail should not cover commercial communications of a

general nature, such as advertising, but rather documents giving a detailed description

of the services proposed, including documents on a website.

Any operator providing services involving a

direct and

particular health, safety or

financial risk for the recipient

or a third person

should

in principle

be covered by

appropriate professional

liability

insurance, or by another form of guarantee which is

equivalent or comparable, which means, in particular, that

normally

he should have

adequate insurance coverage for services provided in one or more Member States

other than the Member State of establishment.

(63)

(63a) The insurance or guarantee should be appropriate to the nature and extent of the

risk. That means that service providers should have cross-border coverage only if

they actually provide services in other Member States. Member States should not

lay down more detailed rules concerning the insurance coverage and fix for

example minimum thresholds for the insurance sum or limits on exclusions from

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the insurance coverage. Service providers and insurance companies should

maintain the necessary flexibility to negotiate insurance policies precisely targeted

to the nature and scope of the risk. Furthermore, it is not necessary that an

obligation of appropriate insurance is laid down by law. It is sufficient if an

insurance obligation is part of the deontological rules laid down by professional

bodies. Finally, there should be no obligation for insurance companies to provide

insurance cover.

(64)

It is necessary to put an end to the total prohibitions of commercial communications

by the regulated professions, not by removing bans on the content of a commercial

communication but rather those which, in a general way and for a given profession,

forbid one or more forms of commercial communication, such as a ban on all

advertising in one or more given media. As regards the content and methods of

commercial communication, it is necessary to encourage professionals to draw up, in

accordance with Community law, codes of conduct at Community level.

(64a)

It is necessary and in the interest of recipients, in particular consumers, to ensure

that service providers have the possibility to offer multidisciplinary services and that

restrictions in this regard be limited to what is necessary to ensure the impartiality

and independence and the integrity of regulated professions. This does not affect

restrictions or prohibitions to carry out particular activities which aim at ensuring

independence in cases in which a Member State entrusts a service provider with a

particular task notably in the area of urban development.

(65)

In order to increase transparency and promote assessments based on comparable

criteria with regard to the quality of the services offered and supplied to recipients, it is

important that information on the meaning of quality labels and other distinctive marks

relating to these services be easily accessible. That obligation of transparency is

particularly important in areas such as tourism, especially the hotel business, in which

the use of a system of classification is widespread. Moreover, it is appropriate to

examine the extent to which European standardisation could facilitate compatibility

and quality of services. European standards are drawn up by the European standards-

setting bodies, the European Committee for Standardisation (CEN), the European

Committee for Electrotechnical Standardisation (CENELEC) and the European

Telecommunications Standards Institute (ETSI). Where appropriate, the Commission

may, in accordance with the procedures laid down in Directive 98/34/EC of the

European Parliament and of the Council of 22 June 1998

laying down a procedure

for the provision of information in the field of technical standards and regulations and

of rules on Information Society services, issue a mandate for the drawing up of

specific European standards

(65a)

In order to solve potential problems with compliance with a judicial decision, it is

appropriate to provide that Member States recognise equivalent guarantees lodged

by institutions or bodies such as banks, insurance providers, or other financial

services providers established in another Member State.

(66)

The development of a network of Member State consumer protection authorities,

which is the subject of Regulation (EC)

No 2006/2004 of the European Parliament

OJ L 204, 21.7.1998, p. 37. Directive as last amended by the Act of Accession 2003.

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and of the Council of 27 October 2004 on cooperation between national authorities

responsible for the enforcement of consumer protection laws

, complements the

cooperation provided for in this Directive. The application of consumer protection

legislation in cross-border cases, in particular with regard to new marketing and

selling practices, as well as the need to remove certain specific obstacles to

cooperation in this field, necessitates a higher degree of cooperation between Member

States. In particular, it is necessary in this area to ensure that Member States require

the cessation of illegal practices by operators in their territory who target consumers in

another Member State.

(66a) Administrative cooperation is essential to make the internal market in services

function properly. Lack of cooperation between Member States results in

proliferation of rules applicable to service providers or duplication of controls for

cross-border activities, and can also be used by rogue traders to avoid supervision or

to circumvent applicable national rules on services. It is, therefore, essential to

provide for clear, legally binding obligations for Member States to cooperate

effectively.

(66b) For the purposes of the Chapter on administrative co-operation, “supervision”

refers to activities such as monitoring and fact finding, problem solving,

enforcement and imposition of sanctions, and subsequent follow-up activities.

(66c) In normal circumstances mutual assistance shall take place directly between

competent authorities. The points of contact designated by Member States shall be

required to facilitate this process only in the event of difficulties being encountered,

for instance if assistance is required to identify the relevant competent authority.

(66d) Certain obligations of mutual assistance apply to all matters covered by this

Directive, including those relating to cases where a service provider establishes in

another Member State. Other obligations of mutual assistance apply only in cases of

cross-border provision of services, where the provision on the freedom to provide

services applies. A further set of obligations apply in all cases of cross-border

provision of services, including areas not covered by the provision on freedom to

provide services. Cross-border provision of services includes cases where services

are provided at a distance and where the recipient travels to the Member State of

establishment of the service provider in order to receive services.

(66e) In cases where a provider moves temporarily to a Member State other than the

Member State of

establishment,

it is necessary to provide for mutual assistance

between those two States so that the former can carry out checks, inspections and

enquiries at the request of the Member State of

establishment

or carry out such checks

on its own initiative if these are merely factual checks.

(66ea) It should not be possible for Member States to circumvent the rules laid down in this

Directive, including the provision on the freedom to provide services, by conducting

checks, inspections or investigations which are discriminatory or disproportionate.

OJ L 364, 9.12.2004, p. 1.

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(66f) The provisions of this Directive concerning the exchange of information regarding

the good repute of providers do not pre-empt initiatives in the area of police and

judicial cooperation in criminal matters, in particular on the exchange of

information between law enforcement authorities and criminal records of the

Member States.

(66g) Cooperation between Member States requires a well-functioning electronic

information system in order to allow competent authorities easily to identify their

relevant interlocutors in other Member States and to communicate in an efficient

way.

(67)

It is necessary to provide that the Member States, in cooperation with the Commission,

are to encourage interested parties to draw up codes of conduct at Community level

aimed in particular at promoting the quality of services and taking into account the

specific nature of each profession. Those codes of conduct should comply with

Community law, especially competition law.

They may not be incompatible with

legally binding rules governing professional ethics and conduct in the Member

States.

(67a) Member States should encourage the setting up of codes of conduct particularly by

professional bodies, organisations and associations at Community level. These codes

of conduct should include, as appropriate to the specific nature of each profession,

rules for commercial communications relating to regulated professions, and rules of

professional ethics and conduct of the regulated professions which aim in particular

at ensuring independence, impartiality and professional secrecy. In addition, the

conditions to which the activities of estate agents are subject should be included in

such codes of conduct. Member States should take accompanying measures to

encourage professional bodies, organisations and associations to implement at

national level the codes of conduct adopted at Community level.

(67b) Codes of conduct at Community level are intended to set minimum standards of

conduct and are complementary to Member States' legal requirements. They do not

preclude Member States, in accordance with Community law, from taking more

stringent measures in law or national professional bodies from providing for greater

protection in their national codes of conduct.

[Recital 68 deleted ]

[Recital 69 deleted]

[Recital 70 moved]

[Recital 71 moved]

[Recital 72 deleted]

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(73)

The measures necessary for the implementation of this Directive should be adopted in

accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the

procedures for the exercise of implementing powers conferred on the Commission

HAVE ADOPTED THIS DIRECTIVE:

HAPTER

General provisions

Article 1

Subject-matter

This Directive establishes general provisions facilitating the exercise of the freedom

of establishment for service providers and the free movement of services,

while

maintaining a high quality of services.

This Directive does not

deal

with the liberalisation of services of general economic

interest, reserved to public or private entities, nor with the privatisation of public

entities providing services.

This Directive does not deal with the abolition of monopolies providing services

nor with aids granted by Member States which are covered by Community rules on

competition.

This Directive does not affect the freedom of Member States to define, in

conformity with Community law, what they consider to be services of general

economic interest, how those services should be organised and financed, in

compliance with the State Aid rules, and what specific obligations they should be

subject to.

This Directive does not affect measures taken at Community level, or at national

level, in conformity with Community law, in order to protect or promote cultural or

linguistic diversity or media pluralism.

This Directive does not affect Member States' rules of criminal law.

This Directive does not affect labour law, that is any legal or contractual provision

concerning employment conditions, working conditions, including health and

safety at work, and the relationship between employers and workers, which

Member States apply in compliance with Community law. Equally this Directive

does not affect the social security legislation of the Member States, as referred to in

OJ L 184, 17.7.1999, p. 23.

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Article 4 of Regulation (EEC) No 1408/71 on the coordination of social security

systems

This Directive does not affect the exercise of fundamental rights as recognised in

the Member States and by the Charter of Fundamental Rights of the European

Union, including the right to negotiate conclude and enforce collective

agreements and to take industrial action.

Article 2

Scope

This Directive shall apply to services supplied by providers established in a Member

State.

This Directive shall not apply to the following activities:

(-a) services of general interest;

(a)

financial services,

such as banking, credit, insurance and re-insurance,

occupational or personal pensions, securities, investment, funds, payment,

investment advice, including the services listed in Annex I to Directive

2000/12/EC of the European Parliament and of the Council of 20 March

2000 relating to the taking up and pursuit of the business of credit

institutions

;

electronic communications services and networks, and associated facilities and

services, with respect to matters covered by Directives 2002/19/EC

2002/20/EC

, 2002/21/EC

, 2002/22/EC

and 2002/58/EC

of the European

Parliament and of the Council ;

transport services

and transport related services falling within the scope of

title V of the EC Treaty;

(b)

(c)

(ca) port services;

(cb) services of temporary work agencies;

(cc) healthcare services whether or not they are provided via healthcare facilities,

and regardless of the ways in which they are organised and financed at

national level or whether they are public or private;

OJ L 149, 5.7.1971, p. 2. Regulation as last amended by Regulation (EC) No 647/2005 (OJ L 117,

4.5.2005 p.1).

OJ L 126, 26.5.2000, p. 1, as last amended by Commission Directive 2004/69/EC (OJ L 125,

28.4.2004, p. 44).

OJ L 108, 24.4.2002, p. 7.

OJ L 108, 24.4.2002, p. 21.

OJ L 108, 24.4.2002, p. 33.

OJ L 108, 24.4.2002, p. 51.

OJ L 201, 31.7.2002, p. 37.

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(cd) audiovisual services, whatever their mode of production, distribution and

transmission, including radio broadcasting and the cinema;

(ce) gambling activities which involve wagering a stake with pecuniary value in

games of chance, including lotteries, gambling in casinos and betting

transactions;

(cf) activities which are connected with the exercise of official authority as set out

in Article 45 of the Treaty;

(cg) social services relating to social housing, childcare and support of families

and persons in need;

(ch) private security services.

This Directive does not apply to the field of taxation.

Article 3

Relationship with other provisions of Community law

If the provisions of this Directive conflict with a provision of another Community

act governing specific aspects of access to or exercise of a service activity in specific sectors

or for specific professions, the provision of the other Community act shall prevail and shall

apply to those specific sectors or professions. These include:

a) Directive 96/71/EC concerning the posting of workers in the framework of the provision

of services

;

b) Council Regulation (EEC) No 1408/71 on the application of social security schemes to

employed persons, to self-employed persons and members of their families moving within

the Community

;

c) Directive 89/552/EEC concerning the pursuit of television broadcasting activities

;

d) Directive 2005/36/EC

concerning the recognition of professional qualifications;

2. This Directive does not affect rules of private international law, in particular rules

governing the law applicable to contractual and non contractual obligations. As a

consequence, consumers will, in principle, benefit from the protection granted to them by

the consumer protection rules laid down in the consumer legislation in force in his Member

State.

Member States shall apply the provisions of this Directive in compliance with the

rules of the Treaty on the right of establishment and the free movement of services.

OJ L 18, 21.1.1997, p. 1.

OJ L 149, 5.7.1971, p. 2, as last amended by Regulation (EC) 647/2005 (OJ L 117, 4.5.2005, p. 1).

OJ L 298, 17.10.1998, p. 23, as last amended by Directive 97/36/EC (OJ L 202, 30.7.1997, p. 60).

OJ L 255, 30.9.2005, p. 22.

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Article 4

Definitions

For the purposes of this Directive, the following definitions shall apply:

(1)

(2)

"service" means any self-employed economic activity,

normally provided for

remuneration,

as referred to in Article 50 of the Treaty;

"provider" means any natural person who is a national of a Member State, or any

legal person,

as referred to in Article 48 of the Treaty, established in a Member

State,

who offers or provides a service;

"recipient" means any natural

person who is a national of a Member State or who

benefits from rights conferred upon him by Community acts,

or any legal person,

referred to in Article 48 of the Treaty, established in a Member State

who, for

professional or non-professional purposes, uses, or wishes to use, a service;

"Member State of

establishment"

means the Member State in whose territory the

provider of the service concerned is established;

"establishment" means the actual pursuit of an economic activity, as referred to in

Article 43 of the Treaty,

by the provider for an indefinite period and through a

stable infrastructure from where the business of providing services is actually

carried out;

"authorisation scheme" means any procedure under which a provider or 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 to the

exercise thereof;

"requirement" means any obligation, prohibition, condition or limit provided for in

the laws, regulations or administrative provisions of the Member States or in

consequence of case-law, administrative practice the rules of professional bodies, or

the collective rules of professional associations or other professional organisations,

adopted in the exercise of their legal autonomy;

rules laid down in collective

agreements negotiated by the social partners shall not as such be seen as

requirements within the meaning of this Directive;

“overriding reasons relating to the public interest” means reasons recognised as

such in the case law of the Court of Justice, including the following grounds:

public policy; public security; public safety; public health; preserving the financial

equilibrium of the social security system; the protection of consumers, recipients of

services and workers; fairness of trade transactions; combating fraud; the

protection of the environment and the urban environment; the health of animals;

intellectual property; the conservation of the national historic and artistic heritage;

social policy objectives and cultural policy objectives;

"competent authority" means any body or authority which has a supervisory or

regulatory role in a Member State in relation to service activities, including, in

particular, administrative authorities, professional bodies, and those professional

(3)

(4)

(5)

(6)

(7)

(7a)

(8)

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associations or other professional organisations which, in the exercise of their legal

autonomy, regulate in a collective manner access to service activities or the exercise

thereof;

(9)

(10)

(11)

(12)

(13)

deleted;

"Member State where the service is provided"

means the Member State

where the

service is supplied by a service provider established in another Member State;

deleted;

"regulated profession" means a professional activity or a group of professional

activities

as referred to in Article 3(1)(a) of Directive 2005/36/EC of the European

Parliament and of the Council on the recognition of professional qualifications

;

"commercial communication" means any form of communication designed to

promote, directly or indirectly, the goods, services or image of an undertaking,

organisation or person engaged in commercial, industrial or craft activity or

practising a regulated profession. The following do not in themselves constitute

commercial communications:

(a)

information enabling direct access to the activity of the undertaking,

organisation or person, including in particular a domain name or an

electronic-mailing address;

communications relating to the goods, services or image of the undertaking,

organisation or person, compiled in an independent manner, particularly when

provided for no financial consideration.

(14)

(b)

OJ L 255, 30.9.2005, p. 22.

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Chapter II

Administrative simplification

Article 5

Simplification of procedures

Member States shall

examine and, if need be,

simplify the procedures and formalities

applicable to access to a service activity and to the exercise thereof.

1a.

The Commission may introduce harmonised forms at Community level, in

accordance with the procedure referred to in Article 42 (2). These forms shall be

equivalent to certificates, attestations and any other documents required of a service

provider.

Where Member States require a provider or recipient to supply a certificate, attestation

or any other document proving that a requirement has been satisfied, they shall accept any

document from another Member State which serves an equivalent purpose or from which it is

clear that the requirement in question has been satisfied. They may not require that a

document from another Member State be produced in its original form, or as a certified copy

or as a certified translation, save in the cases provided for in other Community instruments or

where such a requirement is justified by an overriding reason relating to the public interest

including public order and security.

The first subparagraph shall not affect the right of Member States to require non-certified

translations of documents in one of their official languages.

Paragraph

shall not apply to the documents referred to in Article

50 of Directive

2005/36/EC

of the European Parliament and of the Council on the recognition of

professional qualifications, in Articles 45(3), 46, 49 and 50

of Directive 2004/18/EC

of the

European Parliament and of the Council of 31 March 2004

on the coordination of procedures

for the award of public works contracts, supply contracts and public service contracts, in

Article 3(2) of Directive 98/5/EC

of the European Parliament and of the Council of 16

February 1998 to facilitate practice of the profession of lawyer on a permanent basis in a

Member State other than that in which the qualification was obtained; in Council

Directive 68/151/EEC

, as amended by Directive 2003/58/EC

of the European

Parliament and of the Council of 15 July 2003, as regards disclosure requirements in

respect of certain types of companies ; and in the Eleventh Council Directive 89/666/EEC

of 21 December 1989 concerning disclosure requirements in respect of branches opened in

a Member State by certain types of company governed by the law of another State.

OJ L 255, 30.9.2005, p. 22.

OJ L 134, 30.4.2004, p. 114.

OJ L 77, 14.3.1998, p. 36.

OJ L 65, 14.3.68, p. 8.

OJ L 221, 4.9.2003, p. 13.

OJ L 395, 30.12.89, p. 36.

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Article 6

Points of single contact

Member States shall

ensure

that,

by three years after the entry into force of this

Directive

at the latest, it is possible for a service provider to complete the following

procedures and formalities

in accordance with the provisions of this Chapter and Chapter II

at contact points known as

points of single contact:

all procedures and formalities needed for access to his service activities, in

particular, all necessary declarations, notifications or applications for

authorisation from the competent authorities, including applications for

inclusion in a register, a roll or a database, or for registration with a

professional body or association;

any applications for authorisation needed to exercise his service activities.

The establishment of points of single contact shall be without prejudice to the

allocation of functions and powers among the authorities within national systems.

Article 7

Right to information

Member States shall ensure that the following information is easily accessible to

providers and recipients through the

points of single contact:

(a)

requirements applicable to providers established in their territory, in particular

those requirements concerning the procedures and formalities to be completed

in order to access and to exercise service activities;

the contact details of the competent authorities enabling the latter to be

contacted directly, including the particulars of those authorities responsible for

matters concerning the exercise of service activities;

the means of and conditions for accessing public registers and databases on

providers and services;

the means of redress

which are generally

available in the event of dispute

between the competent authorities and the provider or the recipient, or between

a provider and a recipient or between providers;

the contact details of the associations or organisations, other than the

competent authorities, from which providers or recipients may obtain practical

assistance.

(b)

(c)

(d)

(e)

Member States shall ensure that it is possible for providers and recipients to receive, at

their request, assistance from the competent authorities, consisting in information on the way

in which requirements referred to in point (a) of paragraph 1 are generally interpreted and

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applied.

Where appropriate, such advice shall include a simple step-by-step guide. The

information shall be provided in plain and intelligible language.

Member States shall ensure that the information and assistance referred to in

paragraphs 1 and 2 are provided in a clear and unambiguous manner, that they are easily

accessible at a distance and by electronic means, and that they are kept up-to-date.

Member States shall ensure that the

points of single contact

and the competent

authorities respond as quickly as possible to any request for information or assistance as

referred to in paragraphs 1 and 2 and, in cases where the request is faulty or unfounded,

inform the applicant accordingly without delay.

Member States shall implement paragraphs 1 to 4

by three years after the entry into

force of this Directive at the latest.

Member States and the Commission shall take accompanying measures in order to

encourage

points of single contact

to make the information provided for in

this article

available in other Community languages

as far as this is compatible with their legislation on

the use of languages.

The obligation for competent authorities to assist providers and recipients does not

require these authorities to provide legal advice in individual cases but concerns only

general information on the way in which requirements are usually interpreted or applied.

Article 8

Procedures by electronic means

Member States shall ensure that,

by three years after the entry into force of this

Directive at the latest,

all procedures and formalities relating to access to a service activity

and to the exercise thereof may be easily completed, at a distance and by electronic means, at

the relevant

point of single contact

and with the relevant competent authorities.

Paragraph 1 shall not apply to the inspection of premises on which the service is

provided or of equipment used by the provider or to physical examination of the capability of

the provider.

The Commission shall in accordance with the procedure referred to in Article 42(2)

adopt detailed rules for the implementation of paragraph 1 with a view to facilitating the

interoperability of information systems and use of procedures by electronic means between

Member States.

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Chapter IIa

Freedom of establishment for service providers

ECTION

UTHORISATIONS

Article 9

Authorisation schemes

Member States shall not make access to a service activity or the exercise thereof

subject to an authorisation scheme unless the following conditions are satisfied:

(a)

(b)

(c)

the authorisation scheme does not discriminate against the provider in question;

the need for an authorisation scheme is justified by an overriding reason

relating to the public interest;

the objective pursued cannot be attained by means of a less restrictive measure,

in particular because an

a posteriori

inspection would take place too late to be

genuinely effective.

In the report referred to in Article 41, Member States shall identify their authorisation

schemes and

give reasons showing their compatibility

with paragraph 1.

This section shall not apply to those aspects of authorisation schemes which are

subject to harmonisation under other Community instruments.

Article 10

Conditions for the granting of authorisation

Authorisation schemes shall be based on criteria which preclude the competent

authorities from exercising their power of assessment in an arbitrary or discretionary manner.

The criteria referred to in paragraph 1 must be:

(a)

(b)

(c)

(d)

non-discriminatory;

justified by an overriding reason relating to the public interest;

proportionate to that public interest objective;

precise and unambiguous;

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(e)

(f)

objective;

made public in advance;

(fa) transparent and accessible.

The conditions for granting authorisation for a new establishment shall not duplicate

requirements and controls which are equivalent or essentially comparable as regards their

purpose, to which the provider is already subject in another Member State or in the same

Member State. The contact points referred to in Article 33 and the provider shall assist the

competent authority by providing any necessary information on those requirements.

assessing whether conditions are equivalent or essentially comparable, their effect and the

effectiveness of their enforcement shall be considered, besides their objective and purpose.

The authorisation shall enable the provider to have access to the service activity, or to

exercise that activity, throughout the national territory, including by setting up agencies,

subsidiaries, branches or offices, except where an authorisation for each individual

establishment

or a limitation of the authorisation to a certain part of the territory

is justified

by an overriding reason relating to the public interest.

The authorisation shall be granted as soon as it has been established, in the light of an

appropriate examination, that the conditions for authorisation have been met.

Any refusal or other response from the competent authorities, including the refusal or

withdrawal of an authorisation, shall be fully reasoned, in particular with regard to the

provisions of this Article, and shall be open to challenge before the courts.

This Article shall not call into question the allocation of the competences, at local or

regional level, of the Member States' authorities that grant such authorisation.

Article 11

Duration of authorisation

An authorisation granted to a provider shall not be for a limited period, except in cases

where:

(a)

(b)

(c)

the authorisation is being automatically renewed

or is subject only to the

continued fulfilment of requirements;

the number of available authorisations is limited

by an overriding reason

relating to the public interest; or

a limited authorisation period can be justified by an overriding reason relating

to the public interest.

Paragraph 1 shall not concern the maximum period during which the provider must

actually commence his activity after receiving authorisation.

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Member States shall require a provider to inform the relevant

point of single contact

provided for in Article 6

of the following changes:

the creation of subsidiaries whose activities fall within the scope of the

authorisation system;

changes in his situation which result in the conditions for authorisation no

longer being met.

This Article shall be without prejudice to the Member States’ ability to revoke

authorisations, when the conditions for authorisation are no longer met.

Article 12

Selection from among several candidates

Where the number of authorisations available for a given activity is limited because of

the scarcity of available natural resources or technical capacity, Member States shall apply a

selection procedure to potential candidates which provides full guarantees of impartiality and

transparency, including, in particular, adequate publicity about the launch of the procedure,

the conduct thereof and its completion.

In the cases referred to in paragraph 1, authorisation must be granted for an

appropriate limited period and may not be open to automatic renewal, nor confer any other

advantage on the provider whose authorisation has just expired or on any person having any

particular links with that provider.

Subject to paragraph 1 and to Articles 9 and 10, Member States may take into

account, in establishing the rules for the selection procedure, considerations of public

health, social policy objectives, the health and safety of employees or self-employed persons,

the protection of the environment, the preservation of the cultural heritage and other

overriding reasons relating to the public interest, in conformity with Community law.

Article 13

Authorisation procedures

Authorisation procedures and formalities shall be clear, made public in advance and

such as to provide

the applicants

with a guarantee that their application will be dealt with

objectively and impartially.

Authorisation procedures and formalities shall not be dissuasive and shall not unduly

complicate or delay the provision of the service. They shall be easily accessible and any

charges which

the applicants

may incur from their application shall be proportionate to the

cost of the authorisation procedures in question

and shall not exceed the cost of the

procedure.

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Authorisation procedures and formalities shall provide applicants with a guarantee that

their application will be processed as quickly as possible and, in any event, within a

reasonable period which is fixed and published in advance.

The period shall run only from

the time when all documentation has been submitted.

Failing a response within the time period set in accordance with paragraph 3,

authorisation shall be deemed to have been granted. Different arrangements may nevertheless

be put in place in respect of certain specific activities, where justified by overriding reasons

relating to the public interest.

All applications for authorisation shall be acknowledged as quickly as possible. The

acknowledgement must specify the following:

(a)

(b)

(c)

the period for response referred to in paragraph 3;

the available means of redress;

a statement that in the absence of a response within the period specified, the

authorisation shall be deemed to have been granted.

In the case of an incomplete application the applicant must be informed as quickly as

possible of the need to supply any additional documentation,

as well as any possible effects

on the reasonable period of processing referred to in paragraph 3.

When a request is rejected because it fails to comply with the required procedures or

formalities, the applicant must be informed of the rejection as quickly as possible.

ECTION

EQUIREMENTS PROHIBITED OR SUBJECT TO EVALUATION

Article 14

Prohibited requirements

Member States shall not make access to or the exercise of a service activity in their territory

subject to compliance with any of the following:

(1)

discriminatory requirements based directly or indirectly on nationality or, in the case

of companies, the location of the registered office, including in particular:

(a)

(b)

nationality requirements for the provider, his staff, persons holding the share

capital or members of the provider’s management or supervisory bodies;

a requirement that the provider, his staff, persons holding the share capital or

members of the provider’s management or supervisory bodies be resident

within the territory;

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(2)

a prohibition on having an establishment in more than one Member State or on being

entered in the registers or enrolled with professional bodies or associations of more

than one Member State;

restrictions on the freedom of a provider to choose between a principal or a

secondary establishment, in particular an obligation on the provider to have his

principal establishment in their territory, or restrictions on the freedom to choose

between establishment in the form of an agency, branch or subsidiary;

conditions of reciprocity with the Member State in which the provider already has an

establishment, save in the case of conditions of reciprocity provided for in

Community instruments concerning energy;

the case-by-case application of an economic test making the granting of authorisation

subject to proof of the existence of an economic need or market demand, or an

assessment of the potential or current economic effects of the activity, or an

assessment of the appropriateness of the activity in relation to the economic planning

objectives set by the competent authority;

this prohibition does not concern

planning requirements which do not pursue economic aims but serve overriding

reasons relating to the public interest;

the direct or indirect involvement of competing operators, including within

consultative bodies, in the granting of authorisations or in the adoption of other

decisions of the competent authorities, with the exception of professional bodies and

associations or other organisations acting as the competent authority;

this prohibition

does not concern the consultation of organisations such as chambers of commerce

or social partners on matters other than individual applications for authorisation;

an obligation to provide or participate in a financial guarantee or to take out

insurance from a service-provider or body established in their territory.

This does not

affect the possibility for Member States to require financial guarantees as such,

nor does it affect requirements relating to the participation in a collective

compensation fund, for instance for members of professional bodies or

organisations;

an obligation to have been

pre-registered,

for a given period, in the registers held in

their territory or to have

previously

exercised the activity for a given period in their

territory.

Article 15

Requirements to be evaluated

(3)

(4)

(5)

(6)

(7)

(8)

Member States shall examine whether, under their legal system, any of the

requirements listed in paragraph 2 are imposed and shall ensure that any such requirements

are compatible with the conditions laid down in paragraph 3. Member States shall adapt their

laws, regulations or administrative provisions so as to make them compatible with those

conditions.

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Member States shall examine whether their legal system makes access to a service

activity or the exercise of it subject to compliance with any of the following

non-discriminatory requirements:

(a)

quantitative or territorial restrictions in particular in the form of limits fixed

according to population, or of a minimum geographical distance between

service-providers;

an obligation on a provider to take a specific legal form;

requirements which relate to the shareholding of a company;

requirements, other than those concerning

matters covered by Directive

2005/36/EC

on the recognition of

professional qualifications or provided for

in other Community instruments, which reserve access to the service activity in

question to particular providers by virtue of the specific nature of the activity;

a ban on having more than one establishment in the territory of the same State;

requirements fixing a minimum number of employees;

fixed minimum and/or maximum tariffs with which the provider must comply;

deleted

an obligation on the provider to supply other specific services jointly with his

service.

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Member States shall verify that requirements referred to in paragraph 2 satisfy the

following conditions:

(a)

non-discrimination: requirements must be neither directly nor indirectly

discriminatory according to nationality or, with regard to companies, according

to the location of the registered office;

necessity: requirements must be justified by an overriding reason relating to the

public interest;

proportionality: requirements must be suitable for securing the attainment of

the objective pursued; they must not go beyond what is necessary to attain that

objective; and it must not be possible to replace those requirements with other,

less restrictive measures which attain the same result.

(b)

(c)

4. Rules provided for in paragraphs 1 to 3 only apply to legislation in the field of Services

of General Economic Interest in so far as the application of such rules does not obstruct

the performance, in law or in fact, of the particular task assigned to them.

OJ L 255, 30.9.2005, p. 22.

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In the mutual evaluation report provided for in Article 41, Member States shall specify

the following:

(a)

the requirements that they intend to maintain and the reasons why they

consider that those requirements comply with the conditions set out in

paragraph 3 and 4;

the requirements which have been abolished or made less stringent.

(b)

From the date of entry into force of this Directive, Member States shall not introduce

any new requirement of a kind listed in paragraph 2, unless that requirement satisfies the

conditions laid down in paragraph 3 and the need for it arises from new circumstances.

Member States shall notify to the Commission any new laws, regulations or

administrative provisions which set requirements as referred to in paragraph 5, together with

the reasons for those requirements. The Commission shall communicate the provisions

concerned to the other Member States. Such notification shall not prevent the adoption by

Member States of the provisions in question.

Within a period of 3 months from the date of notification, the Commission shall examine the

compatibility of any new requirements with Community law and, as the case may be, shall

adopt a decision requesting the Member State in question to refrain from adopting them or to

abolish them.

Chapter III

Free movement of services

ECTION

REEDOM TO PROVIDE SERVICES AND RELATED DEROGATIONS

Article 16

Freedom to provide services

Member States shall respect the right of service providers to provide services in a

Member State other than that in which they are established.

The Member State in which the service is provided shall ensure free access to and

free exercise of a service activity within its territory.

Member States shall not make access to or exercise of a service activity in their

territory subject to compliance with any requirements which do not respect the

following principles:

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(a) non-discrimination: the requirement may be neither directly nor indirectly

discriminatory with regard to nationality or, in the case of legal persons, with

regard to the Member State in which they are established,

(b) necessity: the requirement must be justified for reasons of public policy, public

security, public health or the protection of the environment,

the objective pursued, and must not go beyond what is necessary to attain that

objective,

Member States may not restrict the freedom to provide services in the case of a

provider established in another Member State by imposing any of the following

requirements:

(a) an obligation on the provider to have an establishment in their territory;

(b) an obligation on the provider to obtain an authorisation from their competent

authorities including entry in a register or registration with a professional body or

association in their territory, except where provided for in this Directive or other

instruments of Community law;

including an office or chambers, which the provider needs to supply the services in

question;

(d) the application of specific contractual arrangements between the provider and

the recipient which prevent or restrict service provision by the self-employed;

(e) an obligation on the provider to possess an identity document issued by its

competent authorities specific to the exercise of a service activity;

(f) requirements, unless those necessary for health and safety at work, which affect

the use of equipment and material which are an integral part of the service

provided;

(g) restrictions on the freedom to provide the services referred to in Article 20.

The Member State to which the service provider moves shall not be prevented from

imposing requirements with regard to the provision of a service activity, where they are

justified for reasons of public policy, public security, public health or the protection of the

environment, and in accordance with paragraph 1. Nor shall that Member State be

prevented from applying, in conformity with Community law, its rules on employment

conditions, including those laid down in collective agreements.

By five years after the entry into force of this Directive at the latest, the Commission

shall, after consultation of the Member States and the social partners at Community level,

submit to the European Parliament and the Council a report on the application of this

article, in which it shall consider the need to propose harmonisation measures regarding

service activities covered by this Directive.

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Article 17

Additional derogations from the freedom to provide services

Article 16 shall not apply to:

(1)

Services of general economic interest which are provided in another Member State,

inter alia:

(a)

(b)

(c)

(d)

(e)

(2)

(3)

(4)

(5)

in the postal sector, services covered by Directive 97/67/EC

of the European

parliament and of the Council;

in the electricity sector, services covered by Directive 2003/54/EC

of the

European Parliament and of the Council;

in the gas sector, services covered by Directive 2003/55/EC

of the European

Parliament and of the Council;

water distribution and supply services and waste water services;

treatment of waste;

deleted;

matters covered by Directive 96/71/EC

of the European Parliament and the

Council concerning the posting of workers in the framework of the provision of

services;

matters covered by Directive 95/46/EC

of the European Parliament and of the

Council

on the protection of individuals with regard to the processing of personal

data and on the free movement of such data;

matters covered by Council Directive 77/249/EEC

to facilitate the effective

exercise by lawyers of freedom to provide services;

the activity of judicial recovery of debts;

matters covered by title II

of Directive

2005/36/EC

on the recognition of

professional qualifications,

as well as requirements in the Member State where the

service is provided which reserve an activity to a particular profession;

(6)

(7)

(7a)

(8)

OJ L 15, 21.1.1998, p. 14.

OJ L 176, 15.7.2003, p. 37.

OJ L 176, 15.7.2003, p. 57.

OJ L 18, 21.1.1997, p. 1.

OJ L 281, 28.11.1995, p. 1.

OJ L 78, 26.3.1977, p. 17.

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(9)

(10)

matters covered by Regulation (EEC) n° 1408/71 on the coordination of social

security systems

;

as regards administrative formalities concerning the free movement of persons and

their residence, matters covered by

the provisions of Directive 2004/38/EC

of the

European Parliament and the Council of 29 April 2004 on the right of citizens of the

Union and their family members to move and reside freely within the territory of the

Member States, that lay down the administrative formalities that beneficiaries must

undertake before the competent authorities of the Member

State where the service is

provided;

as regards third country nationals who move to another Member State in the

context of the provision of a service the possibility for Member States to require

visa or residence permits for third country nationals who are not covered by the

mutual recognition regime provided for in Article 21 of the Convention

implementing the Schengen Agreement or the possibility to oblige third country

nationals to report to the competent authorities of the Member State in which the

service is provided on or after their entry;

the authorisation regime provided for in Articles 3 and 4 of Council Regulation

(EEC) No 259/93

of 1 February 1993 on the supervision and control of shipments

of waste within, into and out of the European Community

;

and

by Directive 96/9/EC of the European Parliament and of the Council

as well as

industrial property rights;

acts requiring by law the involvement of a notary;

matters covered by Directive …/…/EC on statutory audit of annual accounts and

consolidated accounts and amending Council Directives 78/660/EEC

and

83/349/EEC

;

deleted;

the registration of vehicles leased in another Member State;

(11)

(12)

(13)

(14)

(15)

(16)

(17)

(18)

(19)

OJ L 255, 30.9.2005, p. 22.

OJ L 149, 5.7.1971, p. 2. Regulation as last amended by Regulation (EC) No 647/2005 (OJ L 117,

4.5.2005 p. 1).

OJ L 158, 30.4.2004, p. 77.

OJ L 30, 6.2.1993, p. 1. Regulation as last amended by Commission Regulation (EC) No 2557/2001

(OJ L 349, 31.12.2001, p. 1).

OJ L 24, 27.1.1987, p. 36.

OJ L 77, 27.3.1996, p. 20.

OJ L 222, 14.8.1978, p. 11.

OJ L 193, 18.7.1983, p. 1.

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(20)

provisions regarding contractual and non-contractual obligations, including the

form of contracts, determined pursuant to the rules of private international law.

[Article 18 deleted]

Article 19

Case-by-case derogation

By way of derogation from Article 16, and in exceptional circumstances only, a

Member State may, in respect of a provider established in another Member State, take

measures relating to the safety of services.

[(a), (b) and (c) deleted]

The measures provided for in paragraph 1 may be taken only if the mutual assistance

procedure laid down in Article 37 is complied with and all the following conditions are

fulfilled:

(a)

the national provisions in accordance with which the measure is taken have not

been subject to Community harmonisation in the field referred to in

paragraph 1;

the measures provide for a higher level of protection of the recipient than

would be the case in a measure taken by the Member State of establishment in

accordance with its national provisions;

the Member State of establishment has not taken any measures or has taken

measures which are insufficient as compared with those referred to in Article

37(2);

the measures are proportionate.

(b)

(c)

(d)

Paragraphs 1 and 2 shall be without prejudice to provisions, laid down in Community

instruments, which guarantee the freedom to provide services or which allow derogations

therefrom.

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ECTION

IGHTS OF RECIPIENTS OF SERVICES

Article 20

Prohibited restrictions

Member States may not impose on a recipient requirements which restrict the use of a service

supplied by a provider established in another Member State, in particular the following

requirements:

(a)

(b)

an obligation to obtain authorisation from or to make a declaration to their competent

authorities;

limits on the grant of financial assistance by reason of the fact that the provider is

established in another Member State or by reason of the location of the place at

which the service is provided;

requirements which subject the recipient to discriminatory or disproportionate

fees

on the equipment necessary to receive a service at a distance from another Member

State.

Article 21

Non-discrimination

Member States shall ensure that the recipient is not made subject to discriminatory

requirements based on his nationality or place of residence.

Member States shall ensure that the general conditions of access to a service, which

are made available to the public at large by the provider, do not contain discriminatory

provisions relating to the nationality or place of residence of the recipient, but without

precluding the possibility of providing for differences in the conditions of access where those

differences are directly justified by objective criteria.

Article 22

Assistance for recipients

Member States shall ensure that recipients can obtain

via the points of single contact:

information on the requirements applicable in other Member States relating to

access to and exercise of service activities, in particular those relating to

consumer protection;

(c)

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general

information on the means of redress available in the case of a dispute

between a provider and a recipient;

the contact details of associations or organisations, including the contact points

of the European Consumer Centres Network (ECC-Net),

from which

providers or recipients may obtain practical assistance.

Where appropriate, advice from the competent authorities shall include a simple

step-by-step guide.

Information and assistance shall be provided in a clear and unambiguous manner,

shall be easily accessible at a distance including by electronic means, and shall be

kept up-to-date.

Member States may confer responsibility for the task referred to in paragraph 1 to

points of single contact

or to any other body, such as the contact points of the European

Consumer Centres Network (ECC-Net),

consumer associations or Euro Info Centres.

By the date specified in Article 45 at the latest, Member States shall communicate to

the Commission the names and contact details of the designated bodies. The

Commission shall transmit them to all Member States.

In order to be able to send the information referred to in paragraph 1, the relevant body

approached by the recipient shall contact the relevant body for the Member State concerned.

The latter shall send the information requested as soon as possible. Member States shall

ensure that those bodies give each other mutual assistance and shall put in place all possible

measures for effective cooperation.

The Commission shall, in accordance with the procedure referred to in Article 42(2),

adopt measures for the implementation of paragraphs 1, 2 and 3, specifying the technical

mechanisms for the exchange of information between the bodies of the various Member

States and, in particular, the interoperability of information systems.

[Article 23 deleted]

[Article 24 deleted]

[Article 25 deleted]

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CHAPTER IV

Quality of services

Article 26

Information on providers and their services

Member States shall ensure that providers make the following information available to

the recipient:

(a)

the name of the service provider,

his legal status and form,

the geographic

address at which he is established, and the details which enable him to be

contacted rapidly and communicated with directly and, as the case may be, by

electronic means;

where the provider is registered in a trade or other similar public register, the

name of that register and the provider's registration number, or equivalent

means of identification in that register;

where the activity is subject to an authorisation scheme, the particulars of the

relevant competent authority or the single point of contact;

where the provider exercises an activity which is subject to VAT, the

identification number referred to in Article 22(1) of Directive 77/388/EEC

;

in the case of the regulated professions, any professional body or similar

institution with which the provider is registered, the professional title and the

Member State in which that title has been granted;

the general conditions and clauses, if any, used by the provider;

contractual clauses concerning the law applicable to the contract and/or the

competent courts.

(b)

(c)

(d)

(e)

(f)

(g)

Member States shall ensure that the information referred to in paragraph 1, according

to the provider's preference:

(a)

(b)

(c)

is supplied by the provider on his own initiative;

is easily accessible to the recipient at the place where the service is provided or

the contract concluded;

can be easily accessed by the recipient electronically by means of an address

supplied by the provider;

OJ L 145, 13.6.1977, p. 1.

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(d)

appears in any information documents supplied to the recipient by the provider,

setting out a detailed description of the service he provides.

Member States shall ensure that, at the recipient’s request, providers supply the

following additional information:

(a)

(b)

the main features of the service;

the price of the service or, if an exact price cannot be given, the method for

calculating the price so that the recipient can check it, or a sufficiently detailed

estimate;

[(c) deleted]

(d)

as regards the regulated professions, a reference to the professional rules

applicable in the Member State of establishment and how to access them.

Member States shall ensure that the information which a provider must supply in

accordance with this Chapter is made available or communicated in a clear and unambiguous

manner, and in good time before conclusion of the contract or, where there is no written

contract, before the service is provided.

The information requirements laid down in this Chapter are in addition to

requirements already provided for in Community law and do not prevent Member States from

imposing additional information requirements applicable to providers established in their

territory.

The Commission may, in accordance with the procedure referred to in Article 42(2),

specify the content of the information provided for in paragraphs 1 and 3 of this Article

according to the specific nature of certain activities and may specify the practical means of

implementing paragraph 2.

Article 27

Professional liability insurance and guarantees

Member States

may

ensure that providers whose services present a

direct and

particular risk to the health or safety of the recipient

or a third person,

or to the financial

security of

the recipient, subscribe to professional

liability

insurance appropriate to the nature

and extent of the risk, or provide any guarantee or similar arrangement which is equivalent or

essentially comparable as regards its purpose.

The professional liability insurance or other

guarantee shall cover risks presented by such services when they are provided in other

Member States in the same way as when they are provided in the Member State of

establishment of the service provider.

Member States shall ensure that providers supply a recipient, at his request, with

information on the insurance or guarantees referred to in paragraph 1, and in particular the

contact details of the insurer or guarantor and the territorial coverage.

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When a provider establishes himself in their territory, Member States may not require

professional

liability

insurance or a guarantee from the provider where he is already covered

by a guarantee which is equivalent, or essentially comparable as regards its purpose

and the

coverage it provides in terms of the insured risk, the insured sum or a ceiling for the

guarantee and possible exclusions from the coverage,

in another Member State in which the

provider is already established. Where equivalence is only partial, Member States may require

a supplementary guarantee to cover those aspects not already covered.

When a Member State requires service providers established in its territory to subscribe to

professional liability insurance or to provide any other guarantee, that Member State shall

accept as sufficient evidence attestations of such insurance coverage issued by credit

institutions and insurers established in other Member States.

Paragraphs

1, 2 and 3 do

not affect professional insurance or guarantee

arrangements provided for in other

Community

instruments.

For the implementation

paragraph 1, the Commission may, in accordance with the

procedure referred to in Article 42(2), establish a list of services which exhibit the

characteristics referred to in paragraph 1 and establish common criteria for defining, for the

purposes of the insurance or guarantees referred to in that paragraph, what is appropriate to

the nature and scope of the risk.

In accordance with the procedure referred to in Article

42(2) the Commission may also establish a procedure which would, in the event of

verifiable failure of the insurance market to provide adequate insurance and subject to

specific conditions including notification to the Commission, allow Member States for a

limited period of time to replace the obligation in this Article by an information

requirement.

For the purpose of this Article

-"direct and particular risk" means a risk arising directly from the delivery of the

service;

- "health and safety" means, in relation to a recipient or a third person, the

prevention of death or serious personal injury;

- "financial security" means, in relation to a recipient, the prevention of

substantial losses of money or of value of property;

- "professional liability insurance" means insurance taken out by a provider in

respect of potential liabilities to recipients and, where applicable, third parties

arising out of the provision of the service.

Article 28

After-sales guarantees

Member States shall ensure that providers supply a recipient, at his request, with

information on the existence or otherwise of an after-sales guarantee, on its content and on the

essential criteria for its application, in particular, its period of validity and territorial cover.

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Member States shall ensure that the information referred to in paragraph 1 appears in

any information documents supplied by providers, setting out a detailed description of the

services offered.

Paragraphs 1 and 2 do not affect the regulation of after-sales guarantees provided for

in other Community instruments.

Article 29

Commercial communications by the regulated professions

Member States shall remove all total prohibitions on commercial communications by

the regulated professions.

Member States shall ensure that commercial communications by the regulated

professions comply with professional rules, in conformity with Community law, which relate,

in particular, to the independence, dignity and integrity of the profession, as well as to

professional secrecy, in a manner consonant with the specific nature of each profession.

Professional rules on commercial communications must be non-discriminatory, justified by

an overriding reason relating to the public interest and proportionate.

Article 30

Multidisciplinary activities

Member States shall ensure that providers are not made subject to requirements which

oblige them to exercise a given specific activity exclusively or which restrict the exercise

jointly or in partnership of different activities.

However, the following providers may be made subject to such requirements:

(a)

the regulated professions, in so far as is justified in order to guarantee

compliance with the rules governing professional ethics and conduct, which

vary according to the specific nature of each profession,

and it is necessary to

ensure their independence and impartiality;

providers of certification, accreditation, technical monitoring, test or trial

services in so far as is justified in order to ensure their independence and

impartiality.

(b)

Where multidisciplinary activities

between service providers referred to in paragraph

1 (a) and (b)

are authorised, Member States shall ensure the following:

(a)

(b)

that conflicts of interest and incompatibilities between certain activities are

prevented;

that the independence and impartiality required for certain activities is secured;

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(c)

that the rules governing professional ethics and conduct for different activities

are compatible with one another, especially as regards matters of professional

secrecy.

Member States shall ensure that providers supply the recipient, at his request, with

information on their multidisciplinary activities and partnerships and on the measures taken to

avoid conflicts of interest. That information shall be included in any information document in

which providers give a detailed description of their services.

In the report referred to in Article 41, Member States shall indicate which providers

are subject to the requirements laid down in paragraph 1, the content of those requirements

and the reasons for which they consider them to be justified.

Article 31

Policy on quality of services

Member States shall, in cooperation with the Commission, take accompanying

measures to encourage providers to take action on a voluntary basis in order to ensure the

quality of service provision, in particular through use of one of the following methods:

(a)

(b)

by having their activities certified or assessed by independent bodies;

by drawing up their own quality charter or participating in quality charters or

labels drawn up by professional bodies at Community level.

Member States shall ensure that information on the significance of certain labels and

the criteria for applying labels and other quality marks relating to services can be easily

accessed by recipients and providers.

Member States shall, in cooperation with the Commission, take accompanying

measures to encourage professional bodies, as well as chambers of commerce and craft

associations

and consumer associations,

within Member States to cooperate at Community

level in order to promote the quality of service provision, especially by making it easier to

assess a provider’s competence.

Member States shall, in cooperation with the Commission, take accompanying

measures to encourage the development of independent assessments,

notably by consumer

associations,

in relation to the quality and defects of service provision, and in particular the

development at Community level of comparative trials or testing and the communication of

the results.

Member States,

in cooperation with

the Commission, shall encourage the

development of voluntary European standards with the aim of facilitating compatibility

between services supplied by providers in different Member States, information to the

recipient and the quality of service provision.

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Article 32

Settlement of disputes

Member States shall take the general measures necessary to ensure that providers

supply

contact details, in particular

a postal address, fax number or e-mail address

and a

phone number

to which all recipients, including those resident in another Member State, can

send a complaint or a request for information

about

the service provided.

Providers shall

supply their legal address if this is not their usual address for correspondence.

Member States shall take the general measures necessary to ensure that providers

respond to the complaints referred to in paragraph 1 in the shortest possible time and make

best efforts to find

satisfactory

solutions.

Member States shall take the general measures necessary to ensure that providers are

obliged to demonstrate compliance with the obligations laid down in this Directive as to the

provision of information and to demonstrate that the information is accurate.

Where a financial guarantee is required for compliance with a judicial decision,

Member States shall recognise equivalent guarantees lodged

by a credit institution or insurer

established in another Member State.

Such credit institutions must be authorised in a

Member State in accordance with Directive 2000/12/EC

relating to the taking up and

pursuit of the business of credit institutions and such insurers in accordance, as

appropriate, with Directive 73/239/EEC

on taking up and pursuit of the business of direct

insurance other than life insurance and Directive 2002/83/EC

concerning life insurance.

Member States shall take the general measures necessary to ensure that providers who

are subject to a code of conduct, or are members of a trade association or professional body,

which provides for recourse to a non-judicial means of dispute settlement, inform the

recipient accordingly, and mention that fact in any document which presents their services in

detail, specifying how to access detailed information on the characteristics of and conditions

for the use of such a mechanism.

OJ L 126, 26.5.2000, p. 1.

OJ L 228, 16.8.1973, p. 3.

OJ L 345, 19.12.2002, p. 1.

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CHAPTER V

ECTION

DMINISTRATIVE COOPERATION

Article 33

Mutual assistance

General obligations

Member States shall give each other mutual assistance, and shall put in place all

possible measures for effective cooperation with one another in order to ensure the

supervision of providers and the services they provide.

For the purposes

of this Chapter,

Member States shall designate one or more points of

contact, the contact details of which shall be communicated to the other Member States and

the Commission.

The Commission shall publish and regularly update the list of points of

contact.

Information requests and requests to carry out any checks, inspections and

investigations under this Chapter shall be duly motivated, in particular by specifying the

reason for the request. Information exchanged shall be used only in respect of the matter

for which it was requested.

In the event of receiving a request for assistance from competent authorities in

another Member State, Member States shall ensure that providers established in their

territory supply their competent authorities with all the information necessary for

supervising their activities in compliance with their national laws.

In the event of difficulty in meeting a request for information or in carrying out

checks, inspections and investigations, the Member State in question shall rapidly inform the

requesting Member State with a view to finding a solution.

Member States shall supply the information requested by other Member States or

the Commission by electronic means and within the shortest possible period of time.

Member States shall ensure that registers in which providers have been entered, and

which may be consulted by the competent authorities in their territory, may also be consulted,

in accordance with the same conditions, by the equivalent competent authorities of the other

Member States.

Member States shall communicate to the Commission information on cases where

other Member States do not fulfil their obligations of mutual assistance. Where necessary,

the Commission shall take appropriate steps, including proceedings provided for in Article

226 of the EC-Treaty, in order to ensure that the Member States concerned comply with

their obligations of mutual assistance. The Commission shall periodically inform Member

States about the functioning of the mutual assistance provisions.

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Article 33a

Mutual assistance – General obligations for the Member State of establishment

With respect to providers providing services in another Member State,

the Member

State of establishment shall supply information on providers established in its territory when

requested to do so by another Member State and, in particular, confirmation that a service

provider is established in its territory and, to its knowledge,

is not exercising his activities in

an unlawful manner.

The Member State of establishment shall undertake the checks, inspections and

investigations requested by another Member State and shall inform the latter of the results

and, as the case may be, of the measures taken. In so doing, the competent authorities shall

act to the extent permitted by the powers vested in them in their Member State. The

competent authorities can decide on the most appropriate measures to be taken in each

individual case in order to meet the request by another Member State.

Upon

gaining actual knowledge

of any conduct or specific acts by a provider

established in its territory which

provides services in other Member States,

that, to its

knowledge, could cause serious damage to the health or safety of persons or to the

environment, the Member State of establishment shall inform all other Member States and the

Commission within the shortest possible period of time.

Article 34

Supervision by the Member State of establishment in the event of the temporary

movement of a provider to another Member State

With respect to cases not covered by Article 35(1), the

Member State of establishment

shall ensure

that compliance

with its

requirements is supervised in

conformity with the

powers of supervision provided for in its national law,

in particular through supervisory

measures at the place of establishment of the service provider.

The Member State of establishment shall not refrain from taking supervisory or

enforcement measures in its territory on the grounds that the service has been provided or

caused damage in another Member State.

The obligation laid down in Paragraph 1 shall not entail a duty on the part of the

Member State of establishment to carry out factual checks and controls in the territory of

the Member State where the service is provided. Such checks and controls are carried out

by the authorities of the Member State where the service provider is temporarily operating,

on request of the authorities of the Member State of establishment, in accordance with

Article 35.

Article 35

Supervision by the Member State where the service is provided in the event of the

temporary movement of the provider

With respect to national requirements which may be imposed pursuant to Article 16

or Article 17, the Member State where the service is provided is responsible for the

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supervision of the activity of the service provider in its territory. In conformity with

Community law, the Member State where the service is provided:

- shall take all measures necessary to ensure that service providers comply with

those requirements as regards the access to and the exercise of a service activity;

- shall carry out the checks, inspections and investigations necessary to supervise

the service provided.

With respect to requirements other than the ones referred to in paragraph 1,

where a

provider moves temporarily to another Member State in order to provide a service without

being established there, the competent authorities of that Member State shall participate in the

supervision of the provider in accordance with paragraphs 3

and 4.

At the request of the Member State of establishment,

the competent authorities of the

Member State where the service is provided shall carry out any checks, inspections and

investigations necessary for ensuring effective supervision

by the Member State of

establishment. In so doing, the competent authorities shall act to the extent permitted by the

powers vested in them in their Member State.

The competent authorities can decide on the

most appropriate measures to be taken in each individual case in order to meet the request

by the Member State of establishment.

On their own initiative, the competent authorities of the Member State where the

service is provided may conduct checks, inspections and investigations on the spot, provided

that those checks, inspections or investigations

are not discriminatory, are not motivated by

the fact that the provider is established in another Member State and are proportionate.

[(a), (b) and (c) deleted]

Article 36

Alert mechanism

Where a Member State becomes aware of serious specific acts or circumstances

relating to a service activity that could cause serious damage to the health or safety of

persons or to the environment in its territory or in other Member States, that Member State

shall inform the Member State of establishment, the other Member States concerned and

the Commission within the shortest possible period of time.

The Commission shall promote and take part in the operation of a European

network of Member States’ authorities in order to implement paragraph 1.

The Commission shall adopt and regularly update, in accordance with the

procedure referred to in Article 42(2), detailed rules concerning the management of the

network referred to in paragraph 2.

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Article 36a

Information on the good repute of providers

Member States shall, at the request of a competent authority in another Member State,

supply information,

in conformity with their national law, on disciplinary or administrative

actions or criminal sanctions and decisions

concerning insolvency or bankruptcy involving

fraud, taken by their competent authorities in respect of the provider,

directly relevant to the

service provider’s competence or

professional reliability.

The Member State which supplies

the information shall inform the service provider thereof.

A request made pursuant to paragraph 1 must be duly substantiated, in particular as

regards the reasons for the request for information.

Sanctions and actions referred to in paragraph 1 shall only be communicated if a

final decision has been taken.

With regard to other decisions referred to in paragraph 1, the

Member State which supplies the information shall specify whether a particular decision is

final or whether an appeal has been lodged in respect of it, in which case the Member State in

question should provide an indication of the date when the decision on appeal is expected.

Moreover, that Member State shall specify the provisions of national law pursuant to which

the provider was found guilty or penalised.

Implementation of

paragraphs 1 and 2

must comply with

rules on the provision of

personal data and

with rights guaranteed to persons found guilty or penalised in the Member

States concerned,

including by professional bodies. Any information in question which is

public shall be accessible to consumers.

Article 36b

Accompanying measures

The Commission, in cooperation with Member States, shall establish an electronic

system for the exchange of information between Member States.

Member States shall, with the assistance of the Commission, take accompanying

measures to facilitate the exchange of officials in charge of the implementation of mutual

assistance and training of such officials including language and computer training.

The Commission shall assess the need to establish a multi-annual programme in

order to organise relevant exchanges of officials and training.

Article 37

Mutual assistance in the event of case-by-case derogations

Where a Member State intends to take a measure pursuant to Article 19, the procedure

laid down in paragraphs 2 to 6 of this Article shall apply without prejudice to proceedings

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before the courts

including preliminary proceedings and acts carried out in the framework

of a criminal investigation.

The Member State referred to in paragraph 1 shall ask the Member State of

establishment to take measures with regard to the service provider, supplying all relevant

information on the service in question and the circumstances of the case.

The Member State of establishment shall check, within the shortest possible period

of time, whether the provider is operating lawfully and verify the facts underlying the

request. It shall inform the requesting Member State within the shortest possible

period of time of the measures taken or envisaged or, as the case may be, the reasons

why it has not taken any measures.

Following communication by the Member State of establishment as provided for in

the second subparagraph of paragraph 2, the requesting Member State shall notify the

Commission and the Member State of establishment of its intention to take measures, stating

the following:

(a) the reasons why it believes the measures taken or envisaged by the Member

State of establishment are inadequate;

(b) the reasons why it believes the measures it intends to take fulfil the conditions

laid down in Article 19.

The measures may not be taken until fifteen working days after the date of notification

provided for in paragraph 3.

Without prejudice to the possibility for the requesting Member State to take the

measures in question upon expiry of the period specified in paragraph 4, the Commission

shall, within the shortest possible period of time, examine the compatibility with Community

law of the measures notified.

Where the Commission concludes that the measure is incompatible with Community

law, it shall adopt a decision asking the Member State concerned to refrain from

taking the proposed measures or to put an end to the measures in question as a matter

of urgency.

In the case of urgency, a Member State which intends to take a measure may derogate

from paragraphs 2, 3 and 4. In such cases, the measures shall be notified within the shortest

possible period of time to the Commission and the Member State of establishment, stating the

reasons for which the Member State considers that there is urgency.

Article 38

Implementing measures

In accordance with the procedure referred to in Article 42(2), the Commission shall adopt the

implementing measures necessary for the implementation of this Chapter, specifying the time-

limits provided for in

Articles 33

and 37 and the practical arrangements for the exchange of

information by electronic means between

Member States,

and in particular the

interoperability provisions for information systems.

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Chapter VI

Convergence programme

Article 39

Member States shall, in cooperation with the Commission, take accompanying

measures to encourage the drawing up at Community level,

particularly by professional

bodies, organisations and associations, of codes of conduct aimed at facilitating the

provision of services or the establishment of a provider in another Member State,

conformity with Community law.

Member States shall ensure that the codes of conduct referred to in paragraph 1 are

accessible at a distance, by electronic means.

Member States shall ensure that providers indicate, at the recipient’s request, or in any

information documents which present their services in detail, any codes of conduct to which

they are subject and the address at which these codes may be consulted by electronic means,

specifying the language versions available.

deleted

Article 40

Additional harmonisation

The Commission shall assess, by one year after the

date of transposition

of this

Directive at the latest, the possibility of presenting proposals for harmonisation instruments on

the following subjects:

(a)

(b)

(c)

(d)

deleted

Article 41

Mutual evaluation

By the [date of transposition] at the latest, Member States shall present a report to the

Commission, containing the information specified in the following provisions:

deleted

deleted;

access to the activity

of judicial recovery of debts.

security services and transport of cash and valuables;

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(a)

(b)

(c)

Article 9(2), on authorisation systems;

Article 15(4), on requirements to be evaluated;

Article 30(4), on multidisciplinary activities.

The Commission shall forward the reports provided for in paragraph 1 to the Member

States, which shall submit their observations on each of the reports within six months. Within

the same period, the Commission shall consult interested parties on those reports.

The Commission shall present the reports and the Member States’ observations to the

Committee referred to in Article 42(1), which may make observations.

In the light of the observations provided for in paragraphs 2 and 3, the Commission

shall, by

…*[one

year after the date referred to in Article 45(1)]

at the latest, present a

summary report to the European Parliament and to the Council, accompanied where

appropriate by proposals for additional initiatives.

Article 42

Committee

The Commission shall be assisted by a Committee, consisting of representatives of the

Member States and chaired by the Commission representative.

Where reference is made to this paragraph, Articles 3 and 7 of

Decision 1999/468/EC

shall apply, in accordance with the provisions of Article 8 of that

Decision.

The Committee shall adopt its rules of procedure.

Article 43

Review clause

Following the summary report referred to in Article 41(4), the Commission shall, every three

years, present to the European Parliament and to the Council a

comprehensive

report on the

application of this Directive,

in particular of Articles 2 and 16 thereof,

accompanied, where

appropriate, by proposals for its amendment.

OJ L 184, 17.7.1999, p. 23.

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Article 44

Amendment of Directive 1998/27/EC

In the Annex to Directive 1998/27/EC

, the following point shall be added:

"13. Directive../../EC of the European Parliament and of the Council of … on services in

the internal market (OJ L […], […], p. […])".

Chapter VII

Final provisions

Article 45

Member States shall bring into force the laws, regulations and administrative

provisions necessary to comply with this Directive by

...*(2

years)

at the latest. They shall

forthwith communicate to the Commission the text of those provisions and a correlation table

between those provisions and this Directive.

When Member States adopt those provisions, they shall contain a reference to this

Directive or be accompanied by such a reference on the occasion of their official

publication. Member States shall determine how such reference is to be made.

Member States shall communicate to the Commission the text of the main provisions

of national law which they adopt in the field covered by this Directive.

Article 46

This Directive shall enter into force on the day following that of its publication in the

Official Journal of the European Union.

Article 47

This Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament

The President

For the Council

The President

OJ L 166, 11.6.1998, p. 51.

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FOLLOW-UP LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): Internal Market

Activit(y/ies): Internal Market for goods and services

ITLE

OF ACTION

: A

MENDED

ROPOSAL FOR A

IRECTIVE OF THE

AND OF THE

OUNCIL ON

ERVICES IN THE

NTERNAL

ARKET

UROPEAN

ARLIAMENT

In January 2004, the Commission adopted a proposal for a directive on services in the Internal

Market

. The proposal was accompanied by a legislative financial statement.

The European Parliament adopted its first reading report on this proposal on 16 February

2006. The Commission is now presenting an amended proposal largely based on the first

reading of the European Parliament but also taking into account the discussions in the Council

to date. The amended proposal contains the following changes, relative to the Commission's

original proposal, which will entail Commission resources and will therefore have budgetary

implications:

The amended proposal provides for the establishment of an electronic Internal Market

information system for the exchange of information between Member States. This is aimed at

ensuring that competent authorities have a practical system enabling them to fulfil more easily

their obligations of administrative cooperation under the amended proposal by being able to

easily identify their relevant interlocutors in other Member States and to communicate in an

efficient way. Thus, the legal obligations of administrative cooperation will be underpinned

by a mechanism enabling it to work effectively in practice. This will entail costs for the

Commission in terms, firstly, of development of the system; and, secondly, the administration

of the database.

The amended proposal also sets out an alert mechanism pursuant to which a Member State

becoming aware of serious specific acts or circumstances that could cause serious damage to

the health or safety of persons or to the environment must inform the Member State of

establishment, the other Member States concerned and the Commission. The Commission is

required to promote and take part in the operation of a European network of Member States'

authorities in order to implement this alert mechanism, as well as adopt and regularly update

detailed rules concerning its management, in accordance with the Committee procedure set

out in Article 42. The promotion and operation of this network will entail costs, particularly in

terms of staff, for the Commission.

The amended proposal provides for an assessment by the Commission of the need to establish

a multi-annual programme in order to organise relevant exchanges of officials and training.

There will be costs for the Commission in relation to the carrying out of assessment of the

need for a multi-annual programme.

Proposal for a Directive of the European Parliament and of the Council on services in the internal

market - COM(2004) 2, 13.1.2004.

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Estimates of the overall figures in terms of costs for the Commission are set out below. These

have been updated from the legislative financial statement which accompanied the

Commission's original proposal in order to take account the changes that have been made in

the Commission's amended proposal. These changes include those set out above as well as the

fact that the two studies initially foreseen will no longer be carried out. Part of the costs of the

electronic information system are already financed under the IDAbc programme and therefore

the figures below only reflect the additional costs required. In addition, the Article 42

committee was already foreseen in the original proposal.

BUDGET LINE(S) + HEADING(S)

12 02 01 Implementation and development of the internal market

12 01 04 01 Implementation and development of the internal market – Expenditure

on administrative management

2.1.

OVERALL FIGURES

Total allocation for action (operational expenditure): EUR 0.900 million in

commitment appropriations, already covered by existing allocation under

internal market policy area in the financial programming.

Period of application:

2006 - 2011

2.3.

(a)

Overall multiannual estimate of expenditure:

Schedule of commitment appropriations/payment

intervention)

(see point 3.1.1)

appropriations

(financial

2.2.

EUR million (to three decimal places)

2011

and

subs.

years

2006

Commitments

Payments

(b)

2007

0.200

0.100

2008

2009

2010

Total

0.100

Technical and administrative assistance and support expenditure

(see point 3.1.2)

Commitments

Payments

0.250

0.100

Subtotal a+b

Commitments

0.200

0.250

0.100

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Payments

(c)

0.100

0.350

0.250

0.100

Overall financial impact of human resources and other administrative expenditure

(see points 4.2 and 4.3)

Commitments/

payments

0.016

1.085

1.069

0.064

TOTAL a+b+c

Commitments

Payments

0.016

1.285

1.185

1.319

1.419

0.314

0.164

0.100

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3.1.

3.1.1.

FINANCIAL IMPACT

Total financial impact on operational expenditure - (over the entire

programming period)

Financial intervention

Commitments (in EUR million to three decimal places)

Breakdown

2006

2007

2008

2009

2010

2011 and

subs.

Years]

Total

Action 1

Action 2

etc.

TOTAL

0.200

3.1.2.

Technical and administrative assistance, support expenditure and IT expenditure

(commitment appropriations)

2006

2007

2008

2009

2010

2011 and

subs.

Years

Total

Technical

and

administrative assistance

a) Technical

offices

assistance

b) Other technical and

administrative assistance:

- intra muros:

- extra muros:

of which for construction

and

maintenance

computerised management

systems

Subtotal 1

2) Support expenditure

a) Studies

b) Meetings of experts

0.250

0.100

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Information

publications

and

Subtotal 2

TOTAL

0.250

0.100

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3.2.

Calculation of costs by measure envisaged in operational expenditure (over the

entire programming period)

Commitments (in EUR million to three decimal places)

Breakdown

Type

of outputs

(projects, files )

Number of

outputs

(total for years

2004-2010)

Average unit

cost

Total cost

(total for years

2004-2010)

Action 1

- Measure 1 (development and

monitoring of economic indicators)

Study

0.200

TOTAL COST

0.200

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IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

Human and administrative resource requirements will be covered from within the budget

allocated to the managing DG in the framework of the annual allocation procedure.

4.1.

Impact on human resources

Staff to be assigned to management of the

action using existing resources

Types of post

Number of

permanent posts

Number of

temporary posts

Because the Directive covers a wide

range of services activities specific

knowledge is needed on a multitude of

sectors

(distribution,

regulated

professions, construction, certification,

craftsmen etc.) as well as on specific

questions such as administrative

simplification.

Total

Description of tasks deriving from the

action

Officials

temporary staff

6.5

2.5

Other human resources

Total

1 END

0.5

6.5

3.0

10.5

4.2.

Overall financial impact of human resources

EUR million to three decimal places

Type of human resources

Amount (EUR)

0.972

0.054

0.043

(specify budget line)

Total

1.069

Method of calculation*

9* 0.108

0.5* 0.108

1* 0.043

Officials

Temporary staff

Other human resources

The amounts are total expenditure for twelve months.

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4.3.

Other administrative expenditure deriving from the action

EUR million to three decimal places

Budget line

Amount EUR

(number and heading)

Overall allocation (Title A7)

12 01 02 11 01 – Missions

12 01 02 11 02 – Meetings, conferences

12 01 02 11 03 – Committees (consultative committee)

12 01 02 11 04 – Studies and consultations

Other expenditure (specify)

Information systems

Other administrative expenditure

(specify)

Total

0.080

0.064

0.016

96 experts*650

24 experts* 650

Method of calculation

The amounts are total expenditure for twelve months.

EUR million to three decimal places

II.

III.

Annual total (4.2 + 4.3)

Duration of action

Total cost of action (I x II)

1.149

2 years

2.298

* costs for human resources could be extended beyond the 2 years depending on the results of the negotiation

and the subsequent work programme