Keywords

Summary



Keywords

1 . FREEDOM TO PROVIDE SERVICES - PROVISIONS OF THE TREATY - SCOPE - RECIPIENTS OF SERVICES

( EEC TREATY , ARTS 59 AND 60 )

2 . BALANCE OF PAYMENTS - LIBERALIZATION OF PAYMENTS - CURRENT PAYMENTS AND MOVEMENTS OF CAPITAL - CONCEPTS - PHYSICAL TRANSFER OF BANK NOTES - CLASSIFICATION

( EEC TREATY , ARTS 67 AND 106 )

3 . BALANCE OF PAYMENTS - LIBERALIZATION OF PAYMENTS - CURRENCY COVERED THEREBY

( EEC TREATY , ART . 106 )

4 . BALANCE OF PAYMENTS - LIBERALIZATION OF PAYMENTS - TRANSFERS OF FOREIGN CURRENCY IN CONNECTION WITH THE PROVISION OF SERVICES - RESTRICTIONS - ABOLITION - CONTROLS BY MEMBER STATES - WHETHER PERMISSIBLE - LIMITS

( EEC TREATY , ART . 106 )

Summary

1 . THE FREEDOM TO PROVIDE SERVICES INCLUDES THE FREEDOM , FOR THE RECIPIENTS OF SERVICES , TO GO TO ANOTHER MEMBER STATE IN ORDER TO RECEIVE A SERVICE THERE , WITHOUT BEING OBSTRUCTED BY RESTRICTIONS , EVEN IN RELATION TO PAYMENTS . TOURISTS , PER- SONS RECEIVING MEDICAL TREATMENT AND PERSONS TRAVELLING FOR THE PURPOSES OF EDUCATION OR BUSINESS ARE TO BE REGARDED AS RECIPIENTS OF SERVICES .

2.THE GENERAL SCHEME OF THE TREATY SHOWS , AND A COMPARISON BETWEEN ARTICLES 67 AND 106 CONFIRMS , THAT THE CURRENT PAYMENTS COVERED BY ARTICLE 106 ARE TRANSFERS OF FOREIGN EXCHANGE WHICH CONSTITUTE THE CONSIDERATION WITHIN THE CONTEXT OF AN UNDERLYING TRANSACTION , WHILST THE MOVEMENTS OF CAPITAL COVERED BY ARTICLE 67 ARE FINANCIAL OPERATIONS ESSENTIALLY CONCERNED WITH THE INVESTMENT OF THE FUNDS IN QUESTION RATHER THAN REMUNERATION FOR A SERVICE . FOR THAT REASON MOVEMENTS OF CAPITAL MAY THEMSELVES GIVE RISE TO CURRENT PAY- MENTS , AS IS IMPLIED BY ARTICLES 67 ( 2 ) AND 106 ( 1 ).

THE PHYSICAL TRANSFER OF BANK NOTES MAY NOT THEREFORE BE CLASSIFIED AS A MOVEMENT OF CAPITAL WHERE THE TRANSFER IN QUESTION CORRESPONDS TO AN OBLIGATION TO PAY ARISING FROM A TRANSACTION INVOLVING THE MOVEMENT OF GOODS OR SERVICES .

3.ARTICLE 106 COMPELS MEMBER STATES TO AUTHORIZE THE PAYMENTS REFERRED TO IN THAT PROVISION IN THE CURRENCY OF THE MEMBER STATE IN WHICH THE CREDITOR OR BENEFICIARY RESIDES . PAYMENTS MADE IN THE CURRENCY OF A THIRD COUNTRY ARE NOT THEREFORE COVERED BY THAT PROVISION .

4.ARTICLE 106 OF THE TREATY MUST BE INTERPRETED AS MEANING THAT :

TRANSFERS IN CONNECTION WITH TOURISM OR TRAVEL FOR THE PURPOSES OF BUSINESS , EDUCATION OR MEDICAL TREATMENT CONSTITUTE PAYMENTS AND NOT MOVEMENTS OF CAPITAL , EVEN WHERE THEY ARE EFFECTED BY MEANS OF THE PHYSICAL TRANSFER OF BANK NOTES ;

ANY RESTRICTIONS ON SUCH PAYMENTS ARE ABOLISHED AS FROM THE END OF THE TRANSITIONAL PERIOD ;

MEMBER STATES RETAIN THE POWER TO VERIFY THAT TRANSFERS OF FOREIGN CURRENCY PURPORTEDLY INTENDED FOR LIBERALIZED PAYMENTS ARE NOT IN REALITY USED FOR UNAUTHORIZED MOVEMENTS OF CAPITAL ;

CONTROLS INTRODUCED FOR THAT PURPOSE MAY NOT HAVE THE EFFECT OF LIMITING PAYMENTS AND TRANSFERS IN CONNECTION WITH THE PROVISION OF SERVICES TO A SPECIFIC AMOUNT FOR EACH TRANSACTION OR FOR A GIVEN PERIOD , OR OF RENDERING ILLUSORY THE FREEDOMS RECOGNIZED BY THE TREATY OR OF SUBJECTING THE EXERCISE THEREOF TO THE DISCRETION OF THE ADMINISTRATIVE AUTHORITIES ;

SUCH CONTROLS MAY INVOLVE THE FIXING OF FLAT-RATE LIMITS BELOW WHICH NO VERIFICATION IS CARRIED OUT , WHEREAS IN THE CASE OF EXPENDITURE EXCEEDING THOSE LIMITS PROOF IS REQUIRED THAT THE AMOUNTS TRANSFERRED HAVE ACTUALLY BEEN USED IN CONNECTION WITH THE PROVISION OF SERVICES , PROVIDED HOWEVER THAT THE FLAT-RATE LIMITS SO DETERMINED ARE NOT SUCH AS TO AFFECT THE NORMAL PATTERN OF THE PROVISION OF SERVICES .