COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 26.02.1997 
COM(97)72 final 
96/0002 (SYN) 
Amended proposal for a 
COUNCIL REGULATION (EO 
laying down the conditions under which non-resident carriers may operate 
national road passenger transport services within a Member State 
(presented by the Commission pursuant to Article 189 a (2) 
of the EC-Treaty) 

EXPLANATORY MEMORANDUM 
At its plenary session of 27 and 28 November 1996, the European Parliament approved, 
subject to a number of amendments, the proposal for a Council Regulation (EC) No 
laying down the conditions under which non-resident carriers may operate national road 
passenger transport services within a Member State.1 
The Commission has accepted the amendments concerning: 
- Recital 5a (new), on the gradual approximation of national legislation; 
- Recital 6 concerning the general principle of the liberalization and phased 
harmonization of the conditions of competition, subject to "Union" being replaced by 
"Community"; 
- Recital 6a (new) on the degree of capacity utilization of vehicles; 
- Recital 6c (new) concerning the accessibility of transport systems; 
- Recital 8 on unifying the system applicable to cabotage operations of regular services; 
- Article 1, first indent on the place of establishment of transport companies, subject to 
a formulation being found which is compatible with Article 58 of the Treaty; 
- Article 3 on excluding urban and suburban services from the scope of the Regulation 
on cabotage; 
- Article 4 concerning the deletion of the legal provisions applicable to cabotage 
operations carried out in the course of a regular international service, provided that 
Article 5(2) is also amended to introduce a reference to the services under Article 3(2). 
Parliament's objective in Amendment 9 concerning Recital 8 is to make all cabotage 
operations in the form of regular services subject to the same legal provisions. For 
this reason, Amendment 14 of Parliament's Committee on Transport and Tourism 
proposes deleting from the Commission proposal Article 4, which lays down the legal 
OJ No C 60, 29.02.96. 
provisions applicable to cabotage operations carried out in the course of an 
international service. This makes all cabotage operations under Articles 3(2) and 3(3) 
subject to the same legal provisions, i.e. those contained in Article 5(2), which avoids 
a situation whereby the legal provisions applicable to cabotage operations under 
Article 3(2) are more favourable than those applicable to cabotage operations carried 
out for all the other regular services under Article 3(3). 
However, it still remains possible to perform these cabotage operations, since 
provision is made in Article 3(2). It is therefore necessary to provide that the legal 
provisions applicable to cabotage operations performed in the course of an 
international service are the same as those applicable to cabotage operations under 
Article 3(3) of the Commission proposal, i.e. the national legislation of the host 
Member State referred to in Article 5(2). 
The reference to Article 3(3) in Article 5(2) should therefore be supplemented with a 
reference to Article 3(2) which covers the issue of cabotage in the course of an 
international service. 
- Article 13 on the report on the application of the Regulation and the possible 
submission of a proposal on the basis of the report's conclusions. 
The Commission thus amends its proposal as follows: 
Amended proposal for a 
COUNCIL REGULATION (EC) 
laying down the conditions under which non-resident carriers may operate 
national road passenger transport services within a Member State 
The Commission proposal in document COM(95) 729 final - SYN 96/00022 is amended 
as follows: 
Initial Commission proposal Amended proposal 
Recital 5a (new) 
"Whereas carriers providing such services 
should be subject to comparable systems, 
so as to limit inequality in the conditions of 
competition because of their nationality and 
country of establishment. and hence 
promote the gradual approximation of 
national legislation:" 
Initial Commission proposal Amended proposal 
Recital 6 
"Whereas establishing the internal market 
involves the abolition of frontier controls 
and, consequently, an increase in intra-
Community traffic;" "Whereas Lhe. European Community's 
internal market is an area for the free 
movement of t>oods. persons, services and 
capital: whereas it is necessary to liberalize 
the transport of persons by coach and bus. 
in tandem with the phased harmonization 
of the socio-economic, fiscal and technical 
conditions governing road passenger 
transport within the Member States:" 
2 OJ No C 60, 29.02.96. 
Initial Commission proposal Amended proposal 
Recital 6a (new) 
"Whereas from an environmental point of 
view it is desirable to offer carriers the 
possibility of optimizing the degree of 
capacity utilization of their vehicles:" 
Initial Commission proposal Amended proposal 
Recital 6c (new) 
"Whereas the accessibility of transport 
systems and in particular the accessibility 
of intercity bus ami coach services. 
especially on routes across Europe, is one 
of the objectives of the common transport 
policy;" 
Initial Commission proposal Amended proposal 
Recital 8 
"Whereas the provisions of the host 
Member State applicable to cabotage 
transport operations should be fixed;" "Whereas the provisions of the host 
Member State applicable to cabotage 
transport operations should be fixed, so as 
to ensure that these transport operations are 
carried out under an authorization system 
and that the same regulatory conditions arc 
applicable to cabotage operations of regular 
services, and that these operations are 
carried out exclusively in the host Member 
State or that thev are carried out in the 
course of a regular international service in 
accordance with the provisions of Council 
Regulation No 684/92;" 
Initial Commission proposal Amended proposal 
Recital 9 (new) 
"Whereas urban carriage should, for the 
present, be excluded from the scope of this 
Regulation, in view of its character as a 
service in the general interest:" 
Initial Commission proposal Amended proposal 
Article 1, first indent 
"Any carrier who operates road passenger 
transport services for hire or reward who: 
- is established in a Member State, 
hereinafter referred to as the "Member 
State of establishment", in accordance 
with its legislation, and" "Any carrier who operates road passenger 
transport services for hire or reward who: 
- is established in a Member State of the 
Community, where his central offices 
and main place of business is located, 
hereinafter referred to as the "Member 
State of establishment", in accordance 
with its legislation, and" 
Initial Commission proposal Amended proposal 
Article 3 
"With effect from the date of entry into 
force of this Regulation, cabotage transport 
operations shall be authorized for the 
following services: 
1. special regular services and occasional 
services; 
2. the regular services defined in 
Article 2( 1 ), provided they are performed 
by a carrier not resident in the host 
Member State in the course of a regular 
international service in accordance with 
the provisions of Council Regulation 
684/92; 
3. the other regular services." "With effect from the date of entry into 
force of this Regulation, cabotage transport 
operations shall be authorized for the 
following services: 
1. special regular services and occasional 
services; 
2. the regular services defined in 
Article 2( 1 ), provided they are performed 
by a carrier not resident in the host 
Member State in the course of a regular 
international service in accordance with 
the provisions of Council Regulation 
684/92; 
3. the other regular services. 
Regular urban and suburban services 
shall not be covered by this Regulation." 
Initial Commission proposal Amended proposal 
Article 4 
"1. Cabotage transport operations Deleted. 
carried out in accordance with 
Article 3(2) shall be subject to 
authorization by the competent 
authorities in the host Member 
State. 
2. Applications for authorization may 
be refused: 
(a) if the competent authorities in 
the host Member State 
produce evidence that the 
regular service for which the 
application to perform 
cabotage operations has been 
submitted would directly 
compromise the existence of 
regular services already 
authorized, except in cases in 
which the regular services in 
question are carried out only 
by a single carrier or group of 
carriers; 
(b) if the competent authorities in 
the host Member State 
produce evidence that the 
regular service for which the 
application to perform 
cabotage operations has been 
submitted is aimed only at the 
most lucrative of the services 
existing on the links 
concerned. 
The fact that an operator offers 
lower prices than are offered by 
other road carriers or the fact that 
the link in question is already 
operated by other road carriers may 
not in itself constitute justification 
for rejecting the application. 
Paragraph 4(a) of Article 7 of 
Regulation 684/92 shall apply, 
mutatis mutandis, to applications 
for authorization of cabotage 
operations in the form of the regular 
services provided for in 
Article 3(2). 
Reasons must be given for rejection 
of the application. 
The competent authorities may 
refuse applications only on the basis 
of reasons compatible with this 
Regulation. 
3. The Member States shall guarantee 
carriers an opportunity to defend 
their interests in the event of 
rejection of their application for 
authorization. 
4. Authorizations shall be issued in the 
name of the transport undertaking; 
they may not be transferred by the 
latter to third parties. However, the 
carrier who has received the 
authorization may, with the consent 
of the competent authority in the 
host Member State, operate the 
service through the subcontractor 
authorized to provide the 
international service referred to in 
Article 2(1.1) of Regulation 684/92. 
In this case, the name and role of 
the subcontractor shall be indicated 
in the authorization. The 
subcontractor must fulfil the 
conditions laid down in Article 1. 
In the case of undertakings 
associaled for the purpose of 
performing cabotage operations in 
the form of a regular service, the 
cabotage authorization shall be 
issued in the names of all the 
undertakings. It shall be given to 
the undertaking that manages the 
operation and copies shall be given 
to the others. The authorization 
shall state the names of all the 
operators. 
5. The authorization shall be valid for 
a maximum of five years and, in 
any case, for not longer than the 
authorization relating to the 
international service within the 
framework of which the cabotage 
operation is carried out. 
6. Save in the event of force majeure, 
the operator of a regular cabotage 
service shall, until the authorization 
expires, take all measures to 
guarantee a transport service that 
fulfils the standards of continuity, 
regularity and capacity and the 
other conditions laid down by the 
competent authority of the host 
Member State with regard to the 
route of the service, the bus stops, 
the timetable and the period of 
validity of the authorization. These 
conditions may not be less 
favourable than the conditions 
applied to regular transport services 
provided by resident carriers. 
7. The authorization or a certified true 
copy thereof must be kept on board 
the vehicle. 
8. The Commission shall, after 
consulting the Member States, lay 
down the model for applications for 
authorization of cabotage operations 
in the form of regular services, the 
model authorization and the way in 
which they are to be used." 
Initial Commission proposal Amended proposal 
Article 5(2) Article 4(2) 
"Save as otherwise provided in Community "Save as otherwise provided in Community 
legislation, cabotage operations which form legislation, cabotage operations which form 
part of the transport services provided for part of the transport services provided for 
in Article 3(3) shall be subject to the in Article 3(2) and (3) shall be subject to 
existing laws, regulations and the existing laws, regulations and 
administrative provisions in force in the administrative provisions in force in the 
host Member State, regarding the capacity host Member State, regarding the capacity 
to provide transport services, the routes to to provide transport services, the routes to 
be operated and the regularity, continuity be operated and the regularity, continuity 
and frequency of services. and frequency of services. 
Any compensation for public service Any compensation for public service 
obligations must be paid to all the obligations must be paid to all the 
I Community operators concerned." Community operators concerned." 
Initial Commission proposal Amended proposal 
Article 6 Article 5 
Article 7 Article 6 
Article 8 Article 7 
Article 9 Article 8 
Article 10 Article 9 
Article 11 Article 10 
Article 12 Article 11 
10 
Initial Commission proposal Amended proposal 
Article 13 Article 12 
"The Commission shall report to the "The Commission shall report to the 
Council before 31 December 1999 on the Council and Parliament before 31 
application of this Regulation and, in December 1999 on the application of this 
particular, on the impact of cabotage Regulation and, in particular, on the impact 
transport operations on national transport of cabotage transport operations on national 
markets." transport markets." 
Initial Commission proposal Amended proposal 
Article 14 Article 13 
Article 15 Article 14 
The remainder of the text is unchanged. 
Done at Brussels, For the Council 
ii 

ISSN 0254-1475 
COM(97) 72 final 
DOCUMENTS 
EN 07 10 
Catalogue number : CB-CO-97-063-EN-C 
ISBN 92-78-16192-6 
Office for Official Publications of the European Communities 
L-2985 Luxembourg