WRITTEN QUESTION E-2878/98

by Paul Rübig (PPE) to the Commission

(28 September 1998)

Subject: Obstacles to the cross-border provision of services

Freedom to provide services has been one of the major pillars of the internal market ever since the beginning of the European integration process. Nevertheless, opportunities for improvement continue to exist, with particular regard to businessmen operating in areas close to internal frontiers.

National fees to be paid the execution of contracts in other Member States frequently vary. Similarly, indirect measures, such as lengthy waiting periods of up to six months for the issue of an authorisation to provide services abroad may result in firms being put at a disadvantage. Finally, bureaucratic hurdles, such as obligation to notify in accordance with national legislation on the posting of workers, also hinder the provision of services in other Member States.

Does the Commission regard this as a restriction on the freedom to provide services laid down in Articles 59 et seq. of the EC Treaty? If so, what is it going to do about it?

Answer given by Mr Monti on behalf of the Commission

(16 November 1998)

Freedom to provide services means that any economic operator established in one Member State has the right to provide services on a temporary basis in another Member State without having to be established there. Article 59 of the EC Treaty prohibits any restriction in this respect. The Commission would in particular draw attention to its 1993 interpretative communication on this subject(1), which answers the need for transparency about Community rules and constitutes an important tool for national authorities and economic operators in this context.

The prohibition on restrictions is not absolute but requires the Member States to justify any measures which interfere with the freedom to provide services.

Discriminatory restrictions can only be allowed on grounds expressly mentioned in the EC Treaty, particularly those of public policy, public security or public health mentioned in Article 56 (in conjunction with Article 66). Non-discriminatory restrictions can be justified only if in the field of activity concerned there are compelling reasons of general interest for restricting the freedom to provide services, this interest is not already served by the rules of the Member State in which the service provider is established and the same result cannot be achieved by less restrictive means.

With regard to the questions raised, it thus follows that imposing fees to be paid to the authorities in a Member State does constitute a barrier. Even if this requirement applies to all service providers regardless of the Member State in which they are established, the Member State concerned must justify it on the basis of a compelling reason involving a matter of general interest which is not yet covered by the rules of the Member State in which the service provider is established (cf. the case law developed in the Seco/Evi(2) and Guiot/Climatec(3) cases). Likewise, requiring prior authorisation to provide services is justified only if the matter of general interest concerned is not already covered by the rules of the Member State in which the service provider is established. In the majority of cases prior authorisation is incompatible with Article 59 (cf. Säger/Dennemeyer(4) et Vander Elst(5) cases). Requiring notification prior to providing services is not normally an unjustified barrier, to the extent that it amounts to an obligation to provide information that the service provider is in a proper situation in his Member State of establishment. All the same, the possibility cannot be ruled out that the obligation may be out of proportion to the objective pursued.

(1) OJ C 334, 9.12.1993.

(2) C-62 and 63/81, judgment of 3.2.1982, Rep. 1982, p. 223.

(3) C-272/94, judgment of 28.3.1996, Rep. 1996-1, p. 1905.

(4) C- 76/90, judgment of 25.7.1991, Rep. 1991-1, p. 4221.

(5) C- 43/93, judgment of 9.8.1994, Rep. 1994-1, p. 3803.