Common Position (EC) No 16/2006 of 24 July 2006 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a Directive of the European Parliament and of the Council on services in the internal market
Date: 2006-07-24
Institutions: Council of the European Union
Subjects: freedom to provide services, provision of services, right of establishment, services contract, single market

7.11.2006

EN

Official Journal of the European Union

C 270E/1

I

(Information)

COUNCIL

COMMON POSITION (EC) No 16/2006

adopted by the Council on 24 July 2006

with a view to adopting Directive 2006/…/EC of the European Parliament and of the Council of …
on services in the internal market

(2006/C 967 E/01)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO-
PEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular the first and third sentence of Article
47(2) and Article 55 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Economic and
Social Committee (1),

Having regard to the opinion of
Regions (2),

the Committee of

the

Acting in accordance with the procedure laid down in Article
251 of the Treaty (3),

Whereas:

(1)

the

the Treaty,

The European Community is seeking to forge ever closer
links between the States and peoples of Europe and to
ensure economic and social progress. In accordance with
internal market
Article 14(2) of
comprises an area without internal frontiers in which
the free movement of services is ensured. In accordance
with Article 43 of the Treaty the freedom of establish-
ment is ensured. Article 49 of the Treaty establishes the
right to provide services within the Community. The
elimination of barriers 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. In 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

(1) OJ C 221, 8.9.2005, p. 113.
(2) OJ C 43, 18.2.2005, p. 18.
(3) Opinion of the European Parliament of 16 February 2006 (not yet
published in the Official Journal). Council Common Position of 24
July 2006 and Position of the European Parliament of … (not yet
published in the Official Journal).

employment and of social protection, equality between
sustainable and non-inflationary
men and women,
growth, a high degree of competitiveness and conver-
gence of economic performance, a high level of protec-
tion 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 Euro-
pean Union. At present numerous barriers within the
internal market prevent 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 European
Union 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 information for consumers would give
consumers wider choice and better services at lower
prices.

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
in particular those provided by SMEs,
Member States,
in the field of services. The
which are predominant
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 providers. The barriers affect a wide variety
of service activities across all stages of the provider's

(2)

(3)

C 270E/2

EN

Official Journal of the European Union

7.11.2006

activity and have a number of common features,
including the fact that they often arise from administra-
tive burdens, the legal uncertainty associated with cross-
border activity and the lack of mutual trust between
Member States.

enlargement, be extremely complicated for national and
Community institutions, and, on the other hand, the
lifting of many barriers requires prior coordination of
including the setting up of
national
administrative cooperation. As the European Parliament
and the Council have recognised, a Community legisla-
tive instrument makes it possible to achieve a genuine
internal market for services.

legal schemes,

(4)

(5)

Since services constitute the engine of economic growth
and account for 70 % of GDP and employment in most
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 comple-
tion of the internal market for services. The European
Parliament and the Council have emphasised that the
legal barriers to the establishment of a
removal of
is a matter of priority for
genuine internal market
achieving the goal set by the European Council
in
Lisbon of 23 and 24 March 2000 of improving employ-
ment and social cohesion and achieving sustainable
economic growth so as to make the European Union the
most
knowledge-based
economy in the world by 2010, with more and better
jobs. Removing those barriers, while
ensuring an
advanced European social model, is thus a basic condi-
tion 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
for services, with the right balance
internal market
between market opening and preserving public services
and social and consumer rights.

competitive

dynamic

and

It
is therefore necessary to remove barriers to the
freedom of establishment for 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 providers to develop their service
activities within the internal market either by becoming
established in a Member State or by making use of the
free movement of services. Providers should be able to
choose between those two freedoms, depending on their
strategy for growth in each Member State.

(6)

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

(7)

(8)

(9)

of

legal

national

framework
This Directive establishes a general
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, consul-
tation and complementary harmonisation of specific
issues, which will make possible the progressive and
coordinated modernisation
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, administra-
tive 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 estab-
lish trust between Member States. This Directive also
takes into account other general
interest objectives,
the environment, public
including the protection of
security and public health as well as the need to comply
with labour law.

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 liber-
alise services of general economic interest or to privatise
public entities which provide such services or to abolish
existing monopolies for other activities or certain distri-
bution services.

This Directive applies only to requirements which affect
the access to, or the exercise of, a service activity. There-
it does not apply to requirements, such as road
fore,
traffic rules, rules concerning the development or use of
land, town and country planning, building standards as
well as administrative penalties imposed for non-compli-
ance with such rules which do not specifically regulate
or specifically affect the service activity but have to be
respected by providers in the course of carrying out
their economic activity in the same way as by individuals
acting in their private capacity.

(10)

(11)

(12)

7.11.2006

EN

Official Journal of the European Union

C 270E/3

to public funds

This Directive does not concern requirements governing
access
for certain providers. Such
requirements include notably those laying down condi-
tions under which providers are entitled to receive
public funding, including specific contractual conditions,
and in particular quality standards which need to be
observed as a condition for receiving public funds, for
example for social services.

(15)

This Directive respects the exercise of fundamental rights
applicable in the Member States and as recognised in the
Charter of fundamental Rights of the European Union
and the accompanying explanations, reconciling them
with the fundamental freedoms laid down in Articles 43
and 49 of the Treaty. Those fundamental rights include
the right to take industrial action in accordance with
national
law and practices which respect Community
law.

This Directive does not interfere with measures taken by
Member States, in accordance with Community law, in
relation to the protection or promotion of cultural and
including the
linguistic diversity and media pluralism,
funding thereof. This Directive does not prevent Member
States from applying their fundamental rules and princi-
ples relating to the freedom of press and freedom of
expression. This Directive does not affect Member State
laws prohibiting discrimination on grounds of nation-
ality or on grounds such as those set out in Article 13 of
the Treaty.

This Directive aims at creating a legal framework to
ensure the freedom of establishment and the free move-
ment of services between the Member States and does
not harmonise or prejudice criminal
law. However,
Member States should not be able 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 in circumvention of the rules laid down
in this Directive.

(13)

It is equally important that this Directive fully respect
the
Community initiatives based on Article 137 of
Treaty with a view to achieving the objectives of Article
136 thereof concerning the promotion of employment
and improved living and working conditions.

(14)

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, which Member States apply in compli-
ance with Community law, nor does it affect relations
between social partners, including the right to negotiate
and conclude collective agreements, the right to strike
and to take industrial action in accordance with national
law and practices which respect Community law, nor
does it apply to services provided by temporary work
agencies. This Directive does not affect Member States'
social security legislation.

(16)

This Directive concerns only providers established in a
Member State and does not cover external aspects. It
does not concern negotiations within international orga-
nisations on trade in services, in particular in the frame-
work of the General Agreement on Trade in Services
(GATS).

(17)

(18)

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 consid-
eration 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 this Directive
and certain other services of general economic interest,
for example, those that may exist in the area of postal
services, are the subject of a derogation from the provi-
sion on the freedom to provide services set out in this
Directive. 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 Com-
munity rules on competition. This Directive does not
deal with the follow-up to the Commission White Paper
on Services of General Interest.

Financial services should be excluded from the scope of
this Directive since these activities are the subject of
specific Community legislation aimed, as is this Direc-
tive, at achieving a genuine internal market for services.
Consequently, this exclusion should cover all financial
services such as banking, credit,
including
reinsurance, occupational or personal pensions, securi-
ties, investment funds, payments and investment advice,
to Directive
including the services listed in Annex I
2006/48/EC of
the
Council of 14 June 2006 relating to the taking up and
pursuit of the business of credit institutions (1).

the European Parliament and of

insurance,

(1) OJ L 177, 30.6.2006, p. 1.

C 270E/4

EN

Official Journal of the European Union

7.11.2006

In view of the adoption in 2002 of a package of legisla-
tive instruments relating to electronic communications
networks and services, as well as to associated resources
and services, which has established a regulatory frame-
work facilitating access to those activities within the
internal market, notably through the elimination of most
individual authorisation schemes,
is necessary to
exclude issues dealt with by those instruments from the
scope of this Directive.

it

in which the recipient of the care is resident. This issue
has been addressed by the Court of Justice on numerous
occasions, and the Court has recognised patients' rights.
It is important to address this issue in another Com-
munity legal instrument in order to achieve greater legal
certainty and clarity to the extent that this issue is not
already addressed in Council Regulation (EEC) No
1408/71 of 14 June 1971 on the application of social
security schemes to employed persons, to self-employed
persons and to members of their families moving within
the Community (6).

(19)

(20)

and

networks

electronic

communications

communications

The exclusion from the scope of this Directive as regards
services
matters of
as
covered by Directives 2002/19/EC of
the European
Parliament and of the Council of 7 March 2002 on
access to, and interconnection of, electronic communica-
tions networks and associated facilities (Access Direc-
tive) (1), 2002/20/EC of the European Parliament and of
the Council of 7 March 2002 on the authorisation of
electronic
services
(Authorisation Directive) (2), 2002/21/EC of the Euro-
pean Parliament and of the Council of 7 March 2002 on
a common regulatory framework for electronic commu-
nications networks and services
(Framework Direc-
tive) (3), 2002/22/EC of the European Parliament and of
the Council of 7 March 2002 on universal service and
users'
communications
networks and services (Universal Service Directive) (4)
and 2002/58/EC of the European Parliament and of the
Council of 12 July 2002 concerning the processing of
personal data and the protection of privacy in the elec-
tronic communications sector (Directive on privacy and
electronic communications) (5) 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.

relating to electronic

rights

(21)

Transport services, including urban transport, taxis and
ambulances as well as port services, should be excluded
from the scope of this Directive.

(22)

The exclusion of healthcare from the scope of this Direc-
tive should cover 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.

(24) Audiovisual services, whatever their mode of transmis-
sion, including within cinemas, should also be excluded
from the scope of this Directive. Furthermore, this Direc-
tive should not apply to aids granted by Member States
in the audiovisual sector which are covered by Com-
munity rules on competition.

(25) Gambling activities, including lottery and betting trans-
actions, should be excluded from the scope of this Direc-
tive in view of the specific nature of these activities,
which entail implementation by Member States of poli-
cies relating to public policy and consumer protection.

(26)

This Directive is without prejudice to the application of
Article 45 of the Treaty.

(27)

This Directive should not cover those social services in
the areas of housing, childcare and support to families
and persons in need which are provided by the State at
national, regional or local level by providers mandated
by the State or by charities recognised as such by the
State with the objective of ensuring support for those
who are permanently or temporarily in a particular state
of need because of their insufficient family income or
total or partial lack of independence and for those who
risk being marginalised. These services are essential in
order to guarantee the fundamental right
to human
dignity and integrity and are a manifestation of the prin-
ciples of social cohesion and solidarity and should not
be affected by this Directive.

(23)

the reimbursement of
This Directive does not affect
healthcare provided in a Member State other than that

(1) OJ L 108, 24.4.2002, p. 7.
(2) OJ L 108, 24.4.2002, p. 21.
(3) OJ L 108, 24.4.2002, p. 33.
(4) OJ L 108, 24.4.2002, p. 51.
(5) OJ L 201, 31.7.2002, p. 37. Directive as amended by Directive

2006/24/EC (OJ L 105, 13.4.2006, p. 54).

(28)

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 addition, this Directive should not affect the principle
of universal service in Member States' social services.

(6) OJ L 149, 5.7.1971, p. 2. Regulation as last amended by Regulation
(EC) No 629/2006 of the European Parliament and of the Council
(OJ L 114, 27.4.2006, p. 1).

7.11.2006

EN

Official Journal of the European Union

C 270E/5

(29) Given that the Treaty provides specific legal bases for
taxation matters and given the Community instruments
already adopted in that field, it is necessary to exclude
the field of taxation from the scope of this Directive.

(30)

(31)

(32)

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 addressed by this Directive,
including by means of derogations. However, it is neces-
sary 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
services.

This Directive is consistent with and does not affect
Directive 2005/36/EC of the European Parliament and of
the Council of 7 September 2005 on the recognition of
professional qualifications (1).
It deals with questions
other than those relating to professional qualifications,
for example professional liability insurance, commercial
communications, multidisciplinary activities and admin-
istrative simplification. With regard to temporary cross-
border service provision, a derogation from the provi-
sion on the freedom to provide services in this Directive
ensures that Title II on the free provision of services of
Directive 2005/36/EC is not affected. Therefore, none of
the measures applicable under that Directive in the
Member State where the service is provided is affected
by the provision on the freedom to provide services.

the European Parliament and of

This Directive is consistent with Community legislation
on consumer protection, such as Directive 2005/29/EC
of
the Council of
11 May 2005 concerning unfair business-to-consumer
commercial practices in the internal market (the Unfair
Commercial Practices Directive) (2) 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) (3).

services;

advertising;

tenance;
and the
recruitment
services of commercial agents. The services covered are
also services provided both to businesses and to consu-
mers, 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; and travel agencies. Consumer
services are also covered, such as those in the field of
leisure services, sports
tourism,
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.

including tour guides;

(34) According to the case-law 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 character-
istics, in particular the way they are provided, organised
and financed in the Member State concerned. The Court
of Justice has held that the essential characteristic of
remuneration lies in the fact that it constitutes considera-
tion for the services in question and has recognised 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 enrol-
ment 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 activ-
ities 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.

(33)

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 main-

(1) OJ L 255, 30.9.2005, p. 22.
(2) OJ L 149, 11.6.2005, p. 22.
(3) OJ L 364, 9.12.2004, p. 1. Regulation as amended by Directive

2005/29/EC.

social

(35) Non-profit making amateur sporting activities are of
considerable
importance. They often pursue
wholly social or recreational objectives. Thus, they might
not constitute economic activities within the meaning of
Community law and should fall outside the scope of this
Directive.

C 270E/6

EN

Official Journal of the European Union

7.11.2006

(38)

(39)

(40)

(36)

The concept of
‘provider’ should cover any natural
person who is a national of a Member State or any legal
person engaged in a service activity in a Member State,
in exercise either of the freedom of establishment or of
the free movement of services. The concept of provider
should thus not be limited solely to cross-border service
provision within the framework of the free movement of
services but
in which an
should also cover cases
operator establishes itself in a Member State in order to
develop its service activities there. On the other hand,
the concept of a provider should 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 regis-
tered office, central administration or principal place of
business within the Community. The concept of ‘reci-
pient’ should also cover third country nationals who
already benefit
from rights conferred upon them by
Community acts such as Regulation (EEC) No 1408/71,
Council Directive 2003/109/EC of 25 November 2003
concerning the status of third-country nationals who are
long-term residents (1),
(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 (2) and 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 Member States (3). Furthermore,
the territory of
Member States may extend the concept of recipient to
other third country nationals that are present within
their territory.

Regulation

Council

(37)

The place at which a provider is established should be
determined in accordance with the case law of the Court
of Justice according to which the concept of establish-
ment 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 rela-
tion to particular services. An establishment does not
need to take the form of a subsidiary, branch or agency,
but may 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 under-
taking, 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
provider, a mere letter box does not constitute an estab-
lishment. Where a provider has several places of estab-

(1) OJ L 16, 23.1.2004, p. 44.
(2) OJ L 124, 20.5.2003, p. 1.
(3) OJ L 158, 30.4.2004, p. 77.

lishment, it is important to determine the place of estab-
lishment from which the actual service concerned is
provided. Where it is difficult to determine from which
of several places of establishment a given service is
provided, the location of the provider's centre of activ-
ities relating to this particular service should be that
place of establishment.

The concept of ‘legal persons’, according to the Treaty
leaves operators free to
provisions on establishment,
form which they deem suitable for
choose the legal
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.

‘authorisation scheme’ should cover,
The concept of
the administrative procedures for granting
inter alia,
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.

least

The concept of ‘overriding reasons relating to the public
interest’ to which reference is made in certain provisions
of this Directive has been developed 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
the following grounds: public policy, public
security and public health, within the meaning of Arti-
cles 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 protec-
tion of workers,
including the social protection of
workers; animal welfare; the preservation of the financial
balance of the social security system; the prevention of
fraud; the prevention of unfair competition; the protec-
tion of the environment and the urban environment,
including town and country planning; the protection of
safeguarding the sound administration of
creditors;
justice; road safety; the protection of intellectual prop-
erty; cultural policy objectives,
including safeguarding
the freedom of expression of various elements, in par-
ticular social, cultural, religious and philosophical values
of society; the need to ensure a high level of education,
the maintenance of press diversity and the promotion of
the national
the preservation of national
historical and artistic heritage; and veterinary policy.

language;

7.11.2006

EN

Official Journal of the European Union

C 270E/7

(41)

(42)

The concept of
‘public policy’, as interpreted by the
Court of Justice, covers the protection against a genuine
and sufficiently serious threat affecting one of the funda-
mental interests of society and may include, in particu-
lar, issues relating to human dignity, the protection of
minors and vulnerable adults and animal welfare. Simi-
larly, the concept of public security includes issues of
public safety.

The rules relating to administrative procedures should
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 service undertak-
ings therefrom.

(43) 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
inter alia through the
administrative simplification,
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 autho-
rities after a certain period of time elapsed. Such moder-
nising 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 unne-
cessary or excessively complex and burdensome proce-
dures,
the ‘red tape’
involved in submitting documents, the arbitrary use of
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.

the duplication of procedures,

(44) 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 rela-
tion to establishment.

(45)

In order to examine the need for simplifying procedures
and formalities, Member States should be able, in par-
to take into account their necessity, number,
ticular,
possible duplication, cost, clarity and accessibility, as
well as the delay and practical difficulties to which they
could give rise for the provider concerned.

(46)

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, the right to information, proce-
dures by electronic means and the establishment of a
framework for authorisation schemes. Other measures
level to meet that objective could
adopted at national
involve reduction of
the number of procedures and
formalities applicable to service activities and the restric-
tion of such procedures and formalities to those which
are essential in order to achieve a general interest objec-
tive and which do not duplicate each other in terms of
content or purpose.

(47) 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 authori-
sation as a general rule permits access to, or exercise of,
a service activity throughout
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 terri-
tory is objectively justified by an overriding reason
relating to the public interest.

the national

(48)

In order to further simplify administrative procedures, it
is appropriate to ensure that each provider has a single
point through which he can complete all procedures and
formalities (hereinafter referred to as ‘points of single
contact’). 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 should not inter-
fere 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 cham-
bers of commerce or crafts, or by the professional orga-
nisations 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.

(49)

The fee which may be charged by points of single
contact should be proportionate to the cost of the proce-
dures and formalities with which they deal. This should
not prevent Member States from entrusting the points of
single contact with the collection of other administrative
fees, such as the fee of supervisory bodies.

C 270E/8

EN

Official Journal of the European Union

7.11.2006

(50)

(51)

(52)

It is necessary for providers and recipients of services to
have easy access to certain types of
information It
should be for each Member State to determine, within
the framework of this Directive, the way in which provi-
ders and recipients are provided with information. In
particular, the obligation on Member States to ensure
that relevant information is easily accessible to providers
and recipients and that it can be accessed by the public
without obstacle could be fulfilled by making this infor-
mation accessible through a website. Any information
given should be provided in a clear and unambiguous
manner.

in particular,

The information provided to providers and recipients of
information on
services should include,
procedures and formalities, contact details of the compe-
tent 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. The obligation on competent
authorities to assist providers and recipients should not
include the provision of legal advice in individual cases.
Nevertheless, general information on the way in which
requirements are usually interpreted or applied should
be given. Issues such as liability for providing incorrect
or misleading information should be determined by
Member States.

The setting up, in the reasonably near future, of elec-
tronic means of completing procedures and formalities
will be vital for administrative simplification in the field
of service activities, for the benefit of providers, recipi-
ents 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 obli-
gation should not prevent Member States from providing
other means of completing such procedures and formal-
ities,
in addition to electronic means. The fact that it
must be possible to complete those procedures and
that
formalities at a distance means,
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. Further-
more, this does not interfere with Member States' legisla-
tion on the use of languages.

in particular,

(53)

The granting of licences for certain service activities may
require an interview with the applicant by the competent
authority in order to assess the applicant's personal
integrity and suitability for carrying out the service in
question. In such cases, the completion of formalities by
electronic means may not be appropriate.

of non-discrimination, necessity and proportionality.
That means,
in particular, that authorisation schemes
should be permissible only where an a posteriori inspec-
tion 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
as
Directive 1999/93/EC of the European Parliament and
the Council of 13 December 1999 on a Community
framework for electronic signatures (1), or Directive
2000/31/EC of
the
Council of 8 June 2000 on certain legal aspects of infor-
mation
electronic
in the internal market (Directive on elec-
commerce,
tronic commerce) (2). The results of
the process of
mutual evaluation will make it possible to determine, at
Community level, the types of activity for which authori-
sation schemes should be eliminated.

the European Parliament and of

Community

instruments

particular

services,

society

such

in

(55)

This Directive should be without prejudice to the possi-
bility for Member States to withdraw authorisations after
they have been issued, if the conditions for the granting
of the authorisation are no longer fulfilled.

(56) According to the case law of the Court of Justice, public
health, consumer protection, animal health and the
protection of the urban environment constitute over-
riding reasons relating to the public interest. Such over-
riding reasons may justify the application of authorisa-
tion schemes and other restrictions. However, no such
authorisation scheme or restriction should discriminate
the principles of
on grounds of nationality. Further,
necessity
be
always
respected.

proportionality

should

and

(57)

(58)

The provisions of this Directive relating to authorisation
schemes should concern cases where the access to or
exercise of a service activity by operators requires a deci-
sion 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
service which is
governed by rules on public procurement, since this
Directive does not deal with rules on public procure-
ment.

the provision of a particular

is important

In order to facilitate access to and exercise of service
to evaluate and report on
activities,
it
authorisation schemes
justification. This
reporting obligation concerns only the existence of
authorisation schemes and not the criteria and condi-
tions for the granting of an authorisation.

and their

(54)

The possibility of gaining access to a service activity
should be made subject to authorisation by the compe-
tent authorities only if that decision satisfies the criteria

(1) OJ L 13, 19.1.2000, p. 12.
(2) OJ L 178, 17.7.2000, p. 1.

(59)

(60)

(61)

7.11.2006

EN

Official Journal of the European Union

C 270E/9

The authorisation should as a general rule enable the
provider to have access to the service activity, or to exer-
cise that activity,
territory,
the national
throughout
limit is justified by an overriding
unless a territorial
reason relating to the public interest. For example, envir-
onmental protection may justify the requirement
to
obtain an individual authorisation for each installation
on the national
territory. This provision should not
affect regional or local competences for the granting of
authorisations within the Member States.

activities, where objectively justified by overriding
reasons relating to the public interest, including a legiti-
mate interest of third parties. Such different arrange-
ments could include national rules according to which,
in the absence of a response of the competent authority,
the application is deemed to have been rejected, this
rejection being open to challenge before the courts.

and

in particular

This Directive,
the provisions
concerning authorisation schemes and the territorial
scope of an authorisation, should not interfere with the
division of regional or local competences within the
Member States, including regional and local self-govern-
ment and the use of official languages.

The provision relating to the non-duplication of condi-
tions for the granting of an authorisation should not
prevent Member States from applying their own condi-
tions as specified in the authorisation scheme. It should
only require that competent authorities, when consid-
ering 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 should not require the
application of
the conditions for the granting of an
authorisation provided for in the authorisation scheme
of another Member State.

(62) Where the number of authorisations available for an
activity is limited because of scarcity of natural resources
or technical capacity, a procedure for selection from
among several potential candidates should be adopted
with the aim of developing through open competition
the quality and conditions for supply of services avail-
able to users. Such a procedure should provide guaran-
tees of transparency and impartiality and the authorisa-
tion thus granted should not have an excessive duration,
be subject to automatic renewal or confer any advantage
on the provider whose authorisation has just expired. In
the authorisation granted
particular,
should be fixed in such a way that it does not restrict or
limit free competition beyond what is necessary in order
to enable the provider to recoup the cost of investment
and to make a fair return on the capital invested. This
from
provision should not prevent Member States
limiting the number of authorisations for reasons other
than scarcity of natural resources or technical capacity.
These authorisations should remain in any case subject
to the other provisions of
this Directive relating to
authorisation schemes.

the duration of

(63)

failing a
In the absence of different arrangements,
response within a time period, an authorisation should
be deemed to have been granted. However, different
arrangements may be put in place in respect of certain

(64)

(65)

for
In order to establish a genuine internal market
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.

in particular,
Freedom of establishment is predicated,
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 exer-
cise thereof in a Member State, either as a principal or
secondary activity, should not be made subject to criteria
such as place of establishment, residence, domicile or
principal provision of
the service activity. However,
these criteria should not include requirements according
to which a provider or one of his employees or a repre-
sentative must be present during the exercise of the
activity when this is justified by an overriding reason
relating to the public interest. Furthermore, a Member
State should not restrict the legal capacity or the right of
companies, incorporated in accordance with the law of
another Member State on whose territory they have
their primary establishment, to bring legal proceedings.
Moreover, a Member State should not be able to confer
any advantages on providers having a particular national
or local socio-economic link; nor should it be able to
restrict, on grounds of place of establishment, the provi-
der's freedom to acquire, exploit or dispose of rights and
goods or to access different forms of credit or accommo-
dation in so far as those choices are useful for access to
his activity or for the effective exercise thereof.

(66) Access to or the exercise of a service activity in the terri-
tory of a Member State should not be subject to an
economic test. The prohibition of economic tests as a
prerequisite for the grant of authorisation should cover
economic tests as such, but not requirements which are
objectively justified by overriding reasons relating to the
public interest, such as the protection of the urban envir-
onment, social policy or public health. The prohibition
should not affect
the
the powers of
the exercise of
authorities responsible for applying competition law.

C 270E/10

EN

Official Journal of the European Union

7.11.2006

(67) With respect to financial guarantees or insurance, the
prohibition of requirements should concern only the
obligation that
the requested financial guarantees or
insurance must be obtained from a financial institution
established in the Member State concerned.

(68) With respect

to pre-registration,

the prohibition of
requirements should concern only the obligation that
the provider, prior to the establishment, be pre-regis-
tered for a given period in a register held in the Member
State concerned.

(69)

(70)

(71)

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 certain non-discriminatory national
require-
ments 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 evalua-
tion process should be limited to the compatibility of
these requirements with the criteria already established
by the Court of Justice on the freedom of establishment.
It should not concern the application of Community
competition law. Where such requirements are discrimi-
natory 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 activity and the public
interest concerned.
such requirements
In particular,
could be fully justified when they pursue social policy
objectives.

For the purposes of this Directive, and without prejudice
to Article 16 of the Treaty, services may be considered
to be services of general economic interest only if they
are provided in application of a special task in the public
interest entrusted to the provider by the Member State
concerned. This assignment should be made by way of
one or more acts, the form of which is determined by
the Member State concerned, and should specify the
precise nature of the special task.

The mutual evaluation process provided for in this
the freedom of Member
Directive should not affect
States to set in their legislation a high level of protection
of the public interest, in particular in relation to social
policy objectives. Furthermore,
it is necessary that the
mutual evaluation process take fully into account the
specificity of services of general economic interest and
of the particular tasks assigned to them. This 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 set out in Article 15(3)(a), (b)
and (c). For example, with regard to the obligation to
take a specific legal form in order to exercise certain

(72)

(73)

(74)

services in the social
Justice has
already recognised that it may be justified to subject the
provider to a requirement to be non-profit making.

the Court of

field,

Services of a general economic interest are entrusted
with important tasks relating to social and territorial
cohesion. The performance of these tasks should not be
obstructed as a result of the evaluation process provided
for in this Directive. Requirements which are necessary
for the fulfilment of such tasks should not be affected by
this process while, at the same time, unjustified restric-
tions on the freedom of establishment
should be
addressed.

The requirements to be examined include national rules
which, on grounds other than those relating to profes-
sional qualifications, reserve access to certain activities to
particular providers. These requirements 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 organi-
sation or a company owned exclusively by natural
persons, and requirements which relate to the share-
holding 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 share
capital in or to manage certain companies. The evalua-
tion 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.

the compatibility of

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 ascer-
tain whether any of the above mentioned requirements
exists in their legal systems. At the latest by the end of
the transposition period, Member States should draw up
a report on the results of this 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 observations on these reports. At
the latest by one year after the date of transposition of
this Directive,
the Commission should draw up a
summary report, accompanied where appropriate by
proposals
the
Commission,
in cooperation with the Member States,
could assist them to design a common method.

If necessary

initiatives.

further

for

(75)

The fact that this Directive specifies a number of require-
ments to be abolished or evaluated by the Member
States during the transposition period is without preju-
dice to any infringement proceedings against a Member
State for failure to fulfil its obligations under Articles 43
or 49 of the Treaty.

7.11.2006

EN

Official Journal of the European Union

C 270E/11

(76)

This Directive does not concern the application of Arti-
cles 28 to 30 of the Treaty relating to the free move-
ment 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.

(77) 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
freedom of establishment and the free movement of
services, according to the case law of the Court of Justice
the key element is whether or not the operator is estab-
lished in the Member State where it provides the service
concerned. If the operator is established in the Member
State where it provides its services, it should come under
the scope of application of the freedom of establishment.
If, by contrast, the operator is not established in the
Member State where the service is provided, its activities
should be covered by the free movement of services. The
Court of Justice has consistently held that the temporary
nature of the activities in question should 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. The fact that the activity is temporary should
not mean that the provider may not equip itself with
some forms of infrastructure in the Member State where
the service is provided, such as an office, chambers or
in so far as such infrastructure is
consulting rooms,
necessary for the purposes of providing the service in
question.

(78)

supply

from and

can benefit

In order to secure effective implementation of the free
movement of services and to ensure that recipients and
providers
services
throughout the Community regardless of borders, it is
necessary to clarify the extent to which 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
its specific requirements for
Article 16(1)(a)
reasons of public policy or public security or for the
protection of public health or the environment.

to (c),

(79)

The Court of Justice has consistently held that Member
to take measures in order to
States retain the right
prevent providers from abusively taking advantage of
the internal market principles. Abuse by a provider
should be established on a case by case basis.

(80)

(81)

(82)

(83)

(84)

(85)

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 or situations in which providers
incur additional costs,
for example, by hiring or
purchasing different equipment to that which they habi-
tually use or by needing to deviate significantly from the
way they habitually carry out their activity.

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 provision, such as combustible
fuels, explosives, fireworks, pesticides, poisons or medi-
cines.

The provisions of this Directive should not preclude the
application by a Member State of rules on employment
conditions. Rules laid down by law, regulation or admin-
istrative provisions
in accordance with the
Treaty, be justified for reasons relating to the protection
of workers and be non-discriminatory, necessary, and
proportionate, as interpreted by the Court of Justice, and
comply with other relevant Community law.

should,

is necessary to ensure that

the provision on the
It
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
to which a
instruments relating to services pursuant
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
should also be adopted in certain individual cases and
under certain strict procedural and substantive condi-
tions. 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
form an integral part of the general principles of law
enshrined in the Community legal order.

The derogation from the provision on the freedom to
provide services concerning postal services should cover
both activities reserved to the universal service provider
and other postal services.

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 should concern only the access to and the
exercise of activities which consist, notably, in bringing
actions before a court relating to the recovery of debts.

C 270E/12

EN

Official Journal of the European Union

7.11.2006

(86)

including overtime rates,

This Directive should not affect terms and conditions of
employment which, pursuant to Directive 96/71/EC of
the European Parliament and of
the Council of 16
December 1996 concerning the posting of workers in
the framework of the provision of services (1), apply to
workers posted to provide a service in the territory of
another Member State. In such cases, Directive 96/71/EC
stipulates that 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,
the
minimum rates of pay,
conditions of hiring out of workers,
in particular the
protection of workers hired out by temporary employ-
ment undertakings, health, safety and hygiene at work,
protective measures with regard to the terms and condi-
tions of employment of pregnant women or 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 not only concerns terms and conditions of employ-
ment 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(1) of
Directive 96/71/EC on the grounds of public policy.

(87) Neither should this Directive 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. Further-
more, this Directive should not affect the right for the
Member State 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
the essential characteristic of an employment
relationship within the meaning of Article 39 of the
Treaty should be the fact that for a certain period of
time a person provides services for and under the direc-
tion 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.

(89)

(90)

(91)

(92)

munity law, an activity is reserved in a Member State to
a particular profession, for example requirements which
reserve the provision of legal advice to lawyers.

The derogation from the provision on the freedom to
provide services concerning matters relating to the regis-
tration of vehicles leased in a Member State other than
that in which they are used follows from the case law of
the Court of
recognised that a
Member State may impose such an obligation, in accord-
ance with proportionate conditions, in the case of vehi-
cles used on its territory. That exclusion does not cover
occasional or temporary rental.

Justice, which has

Contractual relations between the provider and the client
as well as between an employer and employee should
to this Directive. The applicable law
not be subject
regarding the contractual or non contractual obligations
of the provider should be determined by the rules of
private international law.

It is necessary to afford Member States the possibility,
taking
exceptionally and on a case-by-case basis, of
measures which derogate from the provision on the
freedom to provide services in respect of a provider
established in another Member State on grounds of the
safety of services. However, it should be possible to take
such measures only in the absence of harmonisation at
Community level.

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. This also includes cases where recipients
of a service are under an obligation to obtain authorisa-
tion 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 same Member State.

(88)

The provision on the freedom to provide services should
in conformity with Com-
not apply in cases where,

(1) OJ L 18, 21.1.1997, p. 1.

(93)

The concept of financial assistance provided for the use
of a particular service should 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, nor to general finan-
cial assistance not
linked to the use of a particular
service, for example grants or loans to students.

7.11.2006

EN

Official Journal of the European Union

C 270E/13

(94)

(95)

In accordance with the Treaty rules on the free move-
ment of services, discrimination on grounds of
the
nationality of the recipient 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 prohi-
bition of discriminatory
should not
preclude the reservation of advantages, especially as
regards tariffs, to certain recipients, if such reservation is
based on legitimate and objective criteria.

requirements

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 restricted 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
incurred because of the distance involved or the tech-
nical 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. Neither
does it follow that the non-provision of a service to a
consumer for lack of the required intellectual property
rights in a particular territory would constitute unlawful
discrimination.

(96)

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
supply his electronic address,
including that of his
website. Furthermore, the obligation to make available
certain information in the provider's information docu-
ments which present 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.

(97)

It is necessary to provide in this Directive for certain
rules on high quality of services, ensuring in particular
information and transparency requirements. These rules
should apply both in cases of cross border provision of
services between Member States and in cases of services
provided in a Member State by a provider established
there, without imposing unnecessary burdens on SMEs.

They should not in any way prevent Member States
from applying,
in conformity with this Directive and
other Community law, additional or different quality
requirements.

(98) Any operator providing services involving a direct and
particular health, safety or financial risk for the recipient
in principle, be covered by
or a third person should,
appropriate professional
insurance, or by
liability
form of guarantee which is equivalent or
another
comparable, which means,
in particular, that such an
operator should as a general rule have adequate insur-
ance cover for services provided in one or more Member
States other than the Member State of establishment.

(99)

The insurance or guarantee should be appropriate to the
nature and extent of the risk. Therefore it should be
necessary for the provider to have cross-border cover
only if that provider actually provides services in other
Member States. Member States should not lay down
more detailed rules concerning the insurance cover and
fix for example minimum thresholds for the insured
sum or limits on exclusions from the insurance cover.
Providers and insurance companies should maintain the
necessary flexibility to negotiate
insurance policies
precisely targeted to the nature and extent of the risk.
it is not necessary for an obligation of
Furthermore,
appropriate insurance to be laid down by law. It should
be sufficient if an insurance obligation is part of the
ethical rules laid down by professional bodies. Finally,
there should be no obligation for insurance companies
to provide insurance cover.

(100)

It is necessary to put an end to total prohibitions on
commercial communications by the regulated profes-
sions, not by removing bans on the content of a
commercial communication but
rather by removing
in a general way and for a given
those bans which,
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
in accordance
to encourage professionals to draw up,
with Community law, codes of conduct at Community
level.

(101)

It is necessary and in the interest of recipients, in par-
ticular consumers, to ensure that it is possible for provi-
ders to offer multidisciplinary services and that restric-
tions in this regard be limited to what is necessary to
ensure the impartiality,
independence and integrity of
the regulated professions. This does not affect restric-
tions or prohibitions on carrying out particular activities
which aim at ensuring independence in cases in which a
Member State entrusts a provider with a particular task,
notably in the area of urban development, nor should it
affect the application of competition rules.

C 270E/14

EN

Official Journal of the European Union

7.11.2006

(102)

that

is important

In order to increase transparency and promote assess-
ments based on comparable criteria with regard to the
quality of the services offered and supplied to recipients,
information on the meaning of
it
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
European
the
the European
Committee for Standardization (CEN),
Committee
Standardization
Electrotechnical
(CENELEC) and the European Telecommunications Stan-
dards Institute (ETSI). Where appropriate, the Commis-
sion 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 (1), issue a mandate for the drawing up
of specific European standards.

bodies,

for

(103)

In order to solve potential problems with compliance
with judicial decisions, it is appropriate to provide that
Member States recognise equivalent guarantees lodged
with institutions or bodies such as banks,
insurance
providers or other financial services providers established
in another Member State.

(104) The development of a network of Member States'
consumer protection authorities, which is the subject of
Regulation (EC) No 2006/2004, complements the coop-
eration 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
greater 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.

(105) Administrative cooperation is essential

to make the
internal market in services function properly. Lack of
cooperation between Member States results in prolifera-
tion of rules applicable to providers or duplication of
controls for cross-border activities, and can also be used
by rogue traders to avoid supervision or to circumvent
therefore,
applicable national rules on services.

is,

It

(1) OJ L 204, 21.7.1998, p. 37. Directive as last amended by the 2003

Act of Accession.

essential to provide for clear, legally binding obligations
for Member States to cooperate effectively.

(106) For the purposes of the Chapter on administrative coop-
eration,
‘supervision’ should cover activities such as
monitoring and fact finding, problem solving, enforce-
ment and imposition of
sanctions and subsequent
follow-up activities.

(107)

In normal circumstances mutual assistance should take
place directly between competent authorities. The liaison
points designated by Member States should 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.

(108) Certain obligations of mutual assistance should apply to
all matters covered by this Directive,
including those
relating to cases where a provider establishes in another
Member State. Other obligations of mutual assistance
should 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 should
apply in all cases of cross-border provision of services,
including areas not covered by the provision on the
freedom to provide services. Cross-border provision of
services should include cases where services are provided
at a distance and where the recipient
travels to the
Member State of establishment of the provider in order
to receive services.

(109)

In cases where a provider moves temporarily to a
Member State other than the Member State of establish-
ment,
it is necessary to provide for mutual assistance
between those two Member 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.

(110)

It should not be possible for Member States to circum-
vent 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.

(111) The provisions of this Directive concerning exchange of
information regarding the good repute of providers
should 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 of
the Member States and on criminal
records.

7.11.2006

EN

Official Journal of the European Union

C 270E/15

(112) Cooperation between Member States requires a well-
functioning electronic information system in order to
allow competent authorities easily to identify their rele-
in other Member States and to
vant
communicate in an efficient way.

interlocutors

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 in
order to achieve those objectives.

(113)

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 Com-
munity 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 competi-
tion law. They should be compatible with legally binding
rules governing professional ethics and conduct in the
Member States.

(117) 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 (1).

(118)

In accordance with paragraph 34 of the Interinstitutional
Agreement on better law-making (2), Member States are
encouraged to draw up,
for themselves and in the
interest of the Community, their own tables, which will,
as far as possible, illustrate the correlation between the
Directive and the transposition measures, and to make
them public,

(114) Member States should encourage the setting up of codes
of conduct, in particular, by professional bodies, organi-
sations 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 the regulated professions
and rules of professional ethics and conduct of the regu-
lated 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.

HAVE ADOPTED THIS DIRECTIVE:

CHAPTER I

GENERAL PROVISIONS

Article 1

Subject matter

(115) Codes of conduct at Community level are intended to set
minimum standards of conduct and are complementary
to Member States'
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.

legal

(116) Since the objectives of this Directive, namely the elimi-
nation of barriers to the freedom of establishment for
providers in the Member States and to the free provision
of services between Member States, cannot be suffi-
ciently 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

1.
This Directive establishes general provisions facilitating
the exercise of the freedom of establishment for service provi-
ders and the free movement of services, while maintaining a
high quality of services.

2.
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.

3.
This Directive does not deal with the abolition of mono-
polies 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.

(1) OJ L 184, 17.7.1999, p. 23.
(2) OJ C 321, 31.12.2003, p. 1.

C 270E/16

EN

Official Journal of the European Union

7.11.2006

This Directive does not affect measures taken at Com-
4.
munity level or at national
in conformity with Com-
level,
munity law, to protect or promote cultural or linguistic diver-
sity or media pluralism.

This Directive does not affect Member States' rules of
5.
law. However, Member States may not restrict the
criminal
freedom to provide services by applying criminal
law provi-
sions which specifically regulate or affect access to or exercise
of a service activity in circumvention of the rules laid down in
this Directive.

6.
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 accordance with national law which
respects Community law. Equally, this Directive does not affect
the social security legislation of the Member States.

7.
This Directive does not affect the exercise of fundamental
rights as recognised in the Member States and by Community
law. Nor does it affect the right to negotiate, conclude and
enforce collective agreements and to take industrial action in
accordance with national law and practices which respect Com-
munity law.

(e) services of temporary work agencies;

(f) 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;

(g) audiovisual services,

including cinematographic services,
whatever their mode of production, distribution and trans-
mission, and radio broadcasting;

(h) gambling activities which involve wagering a stake with
including lotteries,

pecuniary value in games of chance,
gambling in casinos and betting transactions;

(i) activities which are connected with the exercise of official

authority as set out in Article 45 of the Treaty;

(j) social services relating to social housing, childcare and
support of families and persons permanently or temporarily
in need which are provided by the State, by providers
mandated by the State or by charities recognised as such by
the State;

(k) private security services;

(l) services provided by notaries

and bailiffs, who are

appointed by an official act of government.

3.

This Directive shall not apply to the field of taxation.

Article 2

Scope

Article 3

This Directive shall apply to services supplied by provi-

1.
ders established in a Member State.

2.

This Directive shall not apply to the following activities:

(a) non-economic services of general interest;

Relationship with other provisions of Community law

If the provisions of this Directive conflict with a provision
1.
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 profes-
sions. These include:

(b) financial services, such as banking, credit, insurance and re-
insurance, occupational or personal pensions, securities,
advice,
investment
including the services
to Directive
2006/48/EC;

and
listed in Annex I

funds, payment

investment

(c) electronic communications

services and networks, and
associated facilities and services, with respect to matters
covered
2002/20/EC,
2002/19/EC,
Directives
2002/21/EC, 2002/22/EC and 2002/58/EC;

by

(a) Directive 96/71/EC;

(b) Regulation (EEC) No 1408/71;

(c) Council Directive 89/552/EEC of 3 October 1989 on the
coordination of certain provisions laid down by law, regu-
lation or administrative action in Member States concerning
the pursuit of television broadcasting activities (1);

(d) Directive 2005/36/EC.

(d) services in the field of transport, including port services,

falling within the scope of Title V of the Treaty;

(1) OJ L 298, 17.10.1989, p. 23. Directive as amended by Directive
97/36/EC of the European Parliament and of the Council (OJ L 202,
30.7.1997, p. 60).

7.11.2006

EN

Official Journal of the European Union

C 270E/17

2.
This Directive does not concern rules of private interna-
tional law, in particular rules governing the law applicable to
contractual and non contractual obligations,
including those
which guarantee that consumers benefit from the protection
granted to them by the consumer protection rules laid down in
the consumer legislation in force in their Member State.

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;

3. 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.

Article 4

Definitions

8) ‘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
the
financial equilibrium of
protection of
and
workers; fairness of trade transactions; combating fraud;
the protection of the environment and the urban environ-
the
ment;
conservation of the national historic and artistic heritage;
social policy objectives and cultural policy objectives;

the social security system;
services

the health of animals;

intellectual property;

recipients of

consumers,

For the purposes of this Directive, the following definitions
shall apply:

1) ‘service’ means any self-employed economic

activity,
normally provided for remuneration, as referred to in
Article 50 of the Treaty;

2) ‘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 and established in a Member State, who
offers or provides a service;

3) ‘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 as referred to
in Article 48 of the Treaty and established in a Member
State, who, for professional or non-professional purposes,
uses, or wishes to use, a service;

4) ‘Member State of establishment’ means the Member State
in whose territory the provider of the service concerned is
established;

5) ‘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;

6) ‘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 deci-
sion, or an implied decision, concerning access to a service
activity or the exercise thereof;

9) ‘competent authority’ means any body or authority which
has a supervisory or regulatory role in a Member State in
relation to service activities,
in particular,
administrative authorities, including courts acting as such,
professional bodies, and those professional 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;

including,

10) ‘Member State where the service is provided’ means the
Member State where the service is supplied by a provider
established in another Member State;

11) ‘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;

12) ‘commercial communication’ means any form of commu-
nication designed to promote, directly or indirectly, the
goods, services or image of an undertaking, organisation
industrial or craft
or person engaged in commercial,
activity or practising a regulated profession. The following
do not in themselves constitute commercial communica-
tions:

(a) information enabling direct access to the activity of the
undertaking, organisation or person, including in par-
ticular
a domain name or an electronic-mailing
address;

7) ‘requirement’ means any obligation, prohibition, condition
or limit provided for in the laws, regulations or administra-
tive provisions of the Member States or in consequence of
case-law, administrative practice, the rules of professional

(b) 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.

C 270E/18

EN

Official Journal of the European Union

7.11.2006

CHAPTER II

ADMINISTRATIVE SIMPLIFICATION

Article 5

Simplification of procedures

1. Member States shall examine the procedures and formal-
ities applicable to access to a service activity and to the exercise
thereof. Where procedures and formalities examined under this
paragraph are not sufficiently simple, Member States shall
simplify them.

2.
The Commission may introduce harmonised forms at
Community level, in accordance with the procedure referred to
in Article 40(2). These forms shall be equivalent to certificates,
attestations and any other documents required of a provider.

3. 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 equiva-
lent purpose or from which it is clear that the requirement in
question has been satisfied. They may not require a document
from another Member State to 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 3 shall not apply to the documents referred to
4.
in Articles
in Article 7(2) and 50 of Directive 2005/36/EC,
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 coor-
dination of procedures for the award of public works contracts,
public supply contracts and public service contracts (1),
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 (2),
in the First Council Directive 68/151/EEC of 9 March 1968 on
coordination of safeguards which, for the protection of the
interests of members and others, are required by Member
States of companies within the meaning of the second para-
graph of Article 58 of the Treaty, with a view to making such
safeguards equivalent throughout the Community (3) and in the
89/666/EEC
Eleventh

Directive

Council

(1) OJ L 134, 30.4.2004, p. 114. Directive as last amended by Commis-
sion Regulation (EC) No 2083/2005 (OJ L 333, 20.12.2005, p. 28).
(2) OJ L 77, 14.3.1998, p. 36. Directive as amended by the 2003 Act

of Accession.

(3) OJ L 65, 14.3.1968, p. 8. Directive as last amended by Directive
2003/58/EC of the European Parliament and of the Council (OJ L
221, 4.9.2003, p. 13).

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 (4).

Article 6

Points of single contact

1. Member States shall ensure that it is possible for provi-
ders to complete the following procedures and formalities
through points of single contact:

(a) all procedures and formalities needed for access to his
service activities, in particular, all declarations, notifications
or applications necessary for authorisation from the compe-
tent authorities,
including applications for inclusion in a
register, a roll or a database, or for registration with a
professional body or association;

(b) any applications for authorisation needed to exercise his

service activities.

2.
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

1. 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
in particular those requirements concerning the
territory,
procedures and formalities to be completed in order to
access and to exercise service activities;

(b) the contact details of the competent authorities enabling
the latter to be contacted directly, including the details of
those authorities responsible for matters concerning the
exercise of service activities;

(c) the means of, and conditions for, accessing public registers

and databases on providers and services;

(d) 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 reci-
pient or between providers;

(e) the contact details of

the associations or organisations,
other than the competent authorities, from which providers
or recipients may obtain practical assistance.

(4) OJ L 395, 30.12.1989, p. 36.

7.11.2006

EN

Official Journal of the European Union

C 270E/19

2. Member States shall ensure that it is possible for provi-
ders and recipients to receive, at their request, assistance from
the competent authorities, consisting in information on the
way in which the requirements referred to in point (a) of para-
graph 1 are generally interpreted and applied. Where appro-
priate, such advice shall include a simple step-by-step guide.
The information shall be provided in plain and intelligible
language.

3. 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.

the points of single
4. Member States shall ensure that
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.

5. Member States and the Commission shall take accompa-
nying measures in order to encourage points of single contact
to make the information provided for in this Article available
in other Community languages. This does not interfere with
Member States' legislation on the use of languages.

The obligation for competent authorities to assist provi-
6.
ders and recipients does not
require those authorities to
provide legal advice in individual cases but concerns only
information on the way in which requirements are
general
usually interpreted or applied.

CHAPTER III

FREEDOM OF ESTABLISHMENT FOR PROVIDERS

SECTION 1

Authorisations

Article 9

Authorisation schemes

1. 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) the authorisation scheme does not discriminate against the

provider in question;

(b) the need for an authorisation scheme is justified by an

overriding reason relating to the public interest;

(c) 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 effec-
tive.

In the report referred to in Article 39(1), Member States
identify their authorisation schemes and give reasons

2.
shall
showing their compatibility with paragraph 1 of this Article.

3.
This section shall not apply to those aspects of authorisa-
tion schemes which are governed directly or indirectly by other
Community instruments.

Article 8

Article 10

Procedures by electronic means

Conditions for the granting of authorisation

1. Member States shall ensure that all procedures and form-
alities relating to access to a service activity and to the exercise
thereof may be easily completed, at a distance and by electronic
means, through the relevant point of single contact and with
the relevant competent authorities.

Paragraph 1 shall not apply to the inspection of premises
2.
on which the service is provided or of equipment used by the
provider or to physical examination of the capability or of the
personal integrity of the provider or of his responsible staff.

1.
Authorisation schemes shall be based on criteria which
preclude the competent authorities from exercising their power
of assessment in an arbitrary manner.

2.

The criteria referred to in paragraph 1 shall be:

(a) non-discriminatory;

(b) justified by an overriding reason relating to the public

interest;

(c) proportionate to that public interest objective;

3.
The Commission shall, in accordance with the procedure
referred to in Article 40(2), adopt detailed rules for the imple-
mentation of paragraph 1 of this Article with a view to facili-
tating the interoperability of information systems and use of
procedures by electronic means between Member States, taking
into account common standards developed at Community
level.

(d) clear and unambiguous;

(e) objective;

(f) made public in advance;

(g) transparent and accessible.

C 270E/20

EN

Official Journal of the European Union

7.11.2006

3.
The conditions for granting authorisation for a new estab-
lishment shall not duplicate requirements and controls which
are equivalent or essentially comparable as
their
purpose to which the provider is already subject in another
Member State or in the same Member State. The liaison points
referred to in Article 28(2) and the provider shall assist the
competent authority by providing any necessary information
regarding those requirements.

regards

4.
The authorisation shall enable the provider to have access
to the service activity, or to exercise that activity, throughout
the national territory, including by means of setting up agen-
cies, subsidiaries, branches or offices, except where an authori-
sation 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 is estab-
in the light of an appropriate examination, that the

5.
lished,
conditions for authorisation have been met.

6.
Except in the case of the granting of an authorisation,
any decision from the competent authorities, including refusal
or withdrawal of an authorisation, shall be fully reasoned and
shall be open to challenge before the courts or other instances
of appeal.

This Article shall not call into question the allocation of
level, of the Member

7.
the competences, at local or regional
States' authorities granting authorisations.

Article 11

Duration of authorisation

An authorisation granted to a provider shall not be for a

1.
limited period, except where:

(a) the authorisation is being automatically renewed or is
subject only to the continued fulfilment of requirements;

(b) the number of available authorisations is limited by an

overriding reason relating to the public interest; or

(c) a limited authorisation period can be justified by an over-

riding reason relating to the public interest.

2.
Paragraph 1 shall not concern the maximum period
before the end of which the provider must actually commence
his activity after receiving authorisation.

4.
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

1. 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 par-
the launch, conduct and
ticular, adequate publicity about
completion of the procedure.

2.
In the cases referred to in paragraph 1, authorisation shall
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.

3.
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-
the
employed persons,
preservation of cultural heritage and other overriding reasons
relating to the public interest, in conformity with Community
law.

the protection of

the environment,

Article 13

Authorisation procedures

1.
Authorisation procedures and formalities shall be clear,
made public in advance and be such as to provide the appli-
cants with a guarantee that their application will be dealt with
objectively and impartially.

2.
Authorisation procedures and formalities shall not be
dissuasive and shall not unduly complicate or delay the provi-
sion of the service. They shall be easily accessible and any
charges which the applicants may incur from their application
shall be reasonable and proportionate to the cost of the author-
isation procedures in question and shall not exceed the cost of
the procedures.

3. Member States shall require a provider to inform the rele-
vant point of single contact provided for in Article 6 of the
following changes:

(a) the creation of subsidiaries whose activities fall within the

scope of the authorisation scheme,

(b) changes in his situation which result in the conditions for

authorisation no longer being met.

Authorisation procedures and formalities shall provide
3.
their application will be
applicants with a guarantee that
processed as quickly as possible and, in any event, within a
reasonable period which is fixed and made public in advance.
The period shall run only from the time when all documenta-
tion has been submitted. When justified by the complexity of
the time period may be extended once, by the
the issue,
competent authority, for a limited time. The extension and its
duration shall be duly motivated and shall be notified to the
applicant before the original period has expired.

7.11.2006

EN

Official Journal of the European Union

C 270E/21

4.
Failing a response within the time period set or extended
in accordance with paragraph 3, authorisation shall be deemed
to have been granted. Different arrangements may nevertheless
be put in place, where justified by overriding reasons relating
to the public interest, including a legitimate interest of third
parties.

All applications for authorisation shall be acknowledged
5.
as quickly as possible. The acknowledgement must specify the
following:

(a) the period referred to in paragraph 3;

(b) the available means of redress;

(c) where applicable, a statement that in the absence of a
response within the period specified, the authorisation shall
be deemed to have been granted.

6.
In the case of an incomplete application, the applicant
shall be informed as quickly as possible of the need to supply
any additional documentation, as well as of any possible effects
on the period referred to in paragraph 3.

7. When a request is rejected because it fails to comply with
the required procedures or formalities, the applicant shall be
informed of the rejection as quickly as possible.

SECTION 2

Requirements 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) nationality requirements

the provider, his staff,
for
persons holding the share capital or members of the
provider's management or supervisory bodies;

(b) 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;

obligation on the provider to have its principal establish-
ment in their territory, or restrictions on the freedom to
choose between establishment in the form of an agency,
branch or subsidiary;

4) 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;

5) 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, an assessment of
the potential or current economic effects of the activity or
an assessment of the appropriateness of the activity in rela-
tion to the economic planning objectives set by the compe-
tent authority; this prohibition shall not concern planning
requirements which do not pursue economic aims but serve
overriding reasons relating to the public interest;

6) 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 shall not concern the
consultation of organisations,
chambers of
commerce or social partners, on matters other than indivi-
dual applications for authorisation, or a consultation of the
public at large;

such as

7) an obligation to provide or participate in a financial guar-
antee or to take out insurance from a provider or body
established in their territory. This shall not affect the possi-
bility for Member States to require insurance or financial
guarantees as such, nor shall it affect requirements relating
to the participation in a collective compensation fund, for
instance for members of professional bodies or organisa-
tions;

8) an obligation to have been pre-registered,

for a given
in the registers held in their territory or to have
period,
previously exercised the activity for a given period in their
territory.

Article 15

Requirements to be evaluated

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;

3) restrictions on the freedom of a provider to choose between
a principal or a secondary establishment, in particular an

1. 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 administra-
tive provisions so as to make them compatible with those
conditions.

C 270E/22

EN

Official Journal of the European Union

7.11.2006

2. 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
limits fixed according to population or of a

form of
minimum geographical distance between providers;

(b) an obligation on a provider to take a specific legal form;

(c) requirements which relate

to the

shareholding of a

company;

(d) requirements, other than those concerning matters covered
by Directive 2005/36/EC or provided for in other Com-
munity instruments, which reserve access to the service
activity in question to particular providers by virtue of the
specific nature of the activity;

(e) a ban on having more than one establishment in the terri-

tory of the same State;

(f) requirements fixing a minimum number of employees;

(g) fixed minimum and/or maximum tariffs with which the

provider must comply;

(h) an obligation on the provider to supply other specific

services jointly with his service.

(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;

(b) the requirements which have been abolished or made less

stringent.

6.
From … (*), Member States shall not introduce any new
requirement of a kind listed in paragraph 2, unless that require-
ment satisfies the conditions laid down in paragraph 3.

7. Member States shall notify the Commission of any new
regulations or administrative provisions which set
laws,
requirements as referred to in paragraph 6, together with the
reasons for those requirements. The Commission shall commu-
nicate the provisions concerned to the other Member States.
Such notification shall not prevent Member States
from
adopting the provisions in question.

Within a period of 3 months from the date of receipt of the
notification, the Commission shall examine the compatibility of
any new requirements with Community law and, where appro-
priate, shall adopt a decision requesting the Member State in
question to refrain from adopting them or to abolish them.

law in accordance with
The notification of a draft national
Directive 98/34/EC shall fulfil the obligation of notification
provided for in this Directive.

CHAPTER IV

FREE MOVEMENT OF SERVICES

3. Member States shall verify that the requirements referred
to in paragraph 2 satisfy the following conditions:

SECTION 1

Freedom to provide services and related derogations

(a) non-discrimination: requirements must be neither directly
nor indirectly discriminatory according to nationality nor,
with regard to companies, according to the location of the
registered office;

(b) necessity: requirements must be justified by an overriding

reason relating to the public interest;

(c) 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.

4.
Paragraphs 1, 2 and 3 shall apply to legislation in the
field of services of general economic interest only insofar as the
application of these paragraphs does not obstruct the perfor-
mance,
in law or in fact, of the particular task assigned to
them.

Article 16

Freedom to provide services

1. Member States shall respect
the right of 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
to compliance with any
requirements which do not respect the following principles:

territory subject

(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;

In the mutual

5.
Article 39(1), Member States shall specify the following:

evaluation report provided for

in

(*) Date of entry into force of this Directive.

7.11.2006

EN

Official Journal of the European Union

C 270E/23

(b) necessity: the requirement must be justified for reasons of
public policy, public security, public health or the protec-
tion of the environment;

the application of this Article, in which it shall consider the
need to propose harmonisation measures regarding service
activities covered by this Directive.

(c) proportionality:

the requirement must be suitable for
attaining the objective pursued, and must not go beyond
what is necessary to attain that objective.

Article 17

2. 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:

Additional derogations from the freedom to provide
services

Article 16 shall not apply to:

(a) an obligation on the provider to have an establishment in

their territory;

1) Services of general economic interest which are provided

in another Member State, inter alia:

(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 associa-
tion in their territory, except where provided for in this
Directive or other instruments of Community law;

(c) a ban on the provider setting up a certain form or type of
infrastructure in their territory, including an office or cham-
bers, which the provider needs in order to supply the
services in question;

the European Parliament and of

(a) in the postal sector, services covered by Directive
97/67/EC of
the
Council of 15 December 1997 on common rules for
the development of the internal market of Community
postal services and the improvement of quality of
service (1);

(b) in the electricity sector, services covered by Directive
2003/54/EC of the European Parliament and of the
Council of 26 June 2003 concerning common rules
for the internal market in electricity (2);

(d) the

application of

arrangements
between the provider and the recipient which prevent or
restrict service provision by the self-employed;

contractual

specific

(c) in the gas

sector,

services covered by Directive
2003/55/EC of the European Parliament and of the
Council of 26 June 2003 concerning common rules
for the internal market in natural gas (3);

(e) an obligation on the provider to possess an identity docu-
ment issued by its competent authorities specific to the
exercise of a service activity;

services;

(e) treatment of waste;

(d) water distribution and supply services and waste water

(f) requirements, except for those necessary for health and
safety at work, which affect the use of equipment and mate-
rial which are an integral part of the service provided;

(g) restrictions on the freedom to provide the services referred

to in Article 19.

3.
The Member State to which the 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 para-
that Member State be prevented from
graph 1. Nor shall
applying,
its rules on
employment conditions, including those laid down in collective
agreements.

in accordance with Community law,

4.
By … (*) 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

2) matters covered by Directive 96/71/EC;

3) matters covered by Directive 95/46/EC of the European
Parliament and of the Council of 24 October 1995 on the
protection of individuals with regard to the processing of
personal data and on the free movement of such data (4);

4) matters covered by Council Directive 77/249/EEC of 22
March 1977 to facilitate the effective exercise by lawyers
of freedom to provide services (5);

5) the activity of judicial recovery of debts;

6) matters covered by Title II of Directive 2005/36/EC, as
well as requirements in the Member State where the
service is provided which reserve an activity to a particular
profession;

(1) OJ L 15, 21.1.1998, p. 14. Directive as last amended by Regulation

(EC) No 1882/2003 (OJ L 284, 31.10.2003, p. 1).

(2) OJ L 176, 15.7.2003, p. 37. Directive as amended by Council Direc-

tive 2004/85/EC (OJ L 236, 7.7.2004, p. 10).

(3) OJ L 176, 15.7.2003, p. 57.
(4) OJ L 281, 23.11.1995, p. 31. Directive as last amended by Regu-

lation (EC) No 1882/2003.

(5) OJ L 78, 26.3.1977, p. 17. Directive as last amended by the 2003

(*) Five years after the entry into force of this Directive.

Act of Accession.

C 270E/24

EN

Official Journal of the European Union

7.11.2006

7) matters covered by Regulation (EEC) No 1408/71;

provider established in another Member State, take measures
relating to the safety of services.

8) as regards administrative formalities concerning the free
movement of persons and their residence, matters covered
by the provisions of Directive 2004/38/EC that lay down
administrative formalities of the competent authorities of
the Member State where the service is provided with
which beneficiaries must comply;

9) 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 resi-
dence 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 of 14 June 1985 on the gradual abolition of
checks at the common borders (1) 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;

10) as regards the shipment of waste, matters covered by
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 (2);

11) copyright, neighbouring rights and rights covered by
Council Directive 87/54/EEC of 16 December 1986 on the
legal protection of
semiconductor
products (3) and by Directive 96/9/EC of the European
Parliament and of the Council of 11 March 1996 on the
legal protection of databases (4), as well as industrial prop-
erty rights;

topographies of

12) acts requiring by law the involvement of a notary;

13) matters covered by Directive 2006/43/EC of the European
Parliament and of the Council of 17 May 2006 on statu-
tory
consolidated
audit
accounts (5);

accounts

annual

and

of

14) the registration of vehicles leased in another Member State;

15) provisions regarding contractual and non-contractual obli-
including the form of contracts, determined

gations,
pursuant to the rules of private international law.

Article 18

Case-by-case derogations

1.
circumstances only, a Member State may,

By way of derogation from Article 16, and in exceptional
in respect of a

(1) OJ L 239, 22.9.2000, p. 19. Convention as last amended by Regu-
lation (EC) No 1160/2005 of the European Parliament and of the
Council (OJ L 191, 22.7.2005, p. 18).

(2) 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).

(3) OJ L 24, 27.1.1987, p. 36.
(4) OJ L 77, 27.3.1996, p. 20.
(5) OJ L 157, 9.6.2006, p. 87.

2.
The measures provided for in paragraph 1 may be taken
only if the mutual assistance procedure laid down in Article 35
is complied with and 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 of the safety of services;

(b) 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;

(c) 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 35(2);

(d) the measures are proportionate.

Paragraphs 1 and 2 shall be without prejudice to provi-
3.
sions, laid down in Community instruments, which guarantee
the freedom to provide services or which allow derogations
therefrom.

SECTION 2

Rights of recipients of services

Article 19

Prohibited restrictions

Member States may not impose on a recipient requirements
which restrict the use of a service supplied by a provider estab-
lished in another Member State,
in particular the following
requirements:

(a) an obligation to obtain authorisation from or to make a

declaration to their competent authorities;

(b) discriminatory 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.

7.11.2006

EN

Official Journal of the European Union

C 270E/25

Article 20

Non-discrimination

each other mutual assistance and shall put in place all possible
measures for effective cooperation. Together with the Commis-
sion, Member States shall put in place practical arrangements
necessary for the implementation of paragraph 1.

1. Member States shall ensure that the recipient is not made
subject to discriminatory requirements based on his nationality
or place of residence.

2. 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 differ-
ences in the conditions of access where those differences are
directly justified by objective criteria.

Article 21

Assistance for recipients

4.
The Commission shall, in accordance with the procedure
referred to in Article 40(2), adopt measures for the implemen-
tation of paragraphs 1, 2 and 3 of this Article, 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, taking into account
common standards.

CHAPTER V

QUALITY OF SERVICES

Article 22

Information on providers and their services

1. Member States shall ensure that recipients can obtain, in
their Member State of residence, the following information:

1. Member States shall ensure that providers make the
following information available to the recipient:

(a) general

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;

(a) the name of the provider, his legal status and form, the
geographic address at which he is established and details
enabling him to be contacted rapidly and communicated
with directly and, as the case may be, by electronic means;

(b) general

information on the means of redress available in

the case of a dispute between a provider and a recipient;

(c) the

contact details of

associations or organisations,
including the centres of the European Consumer Centres
Network, 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.

2. Member States may confer responsibility for the task
referred to in paragraph 1 on points of single contact or on
any other body, such as the centres of the European Consumer
Centres Network, consumer associations or Euro Info Centres.

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.

(b) 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;

(c) where the activity is subject to an authorisation scheme,
the particulars of the relevant competent authority or the
single point of contact;

(d) where the provider exercises an activity which is subject to
VAT, the identification number referred to in Article 22(1)
of Sixth Council Directive 77/388/EEC of 17 May 1977 on
the harmonisation of
the Member States
relating to turnover taxes — Common system of value
added tax: uniform basis of assessment (1);

the laws of

(e) in the case of the regulated professions, any professional
body or similar institution with which the provider is regis-
tered, the professional title and the Member State in which
that title has been granted;

(f) the general conditions and clauses,

if any, used by the

provider;

3.
In fulfilment of the requirements set out in paragraphs 1
and 2, the body approached by the recipient shall, if necessary,
contact the relevant body for the Member State concerned. The
latter shall send the information requested as soon as possible
to the requesting body which shall forward the information to
the recipient. Member States shall ensure that those bodies give

(g) the existence of contractual clauses,

if any, used by the
provider concerning the law applicable to the contract and/
or the competent courts;

(1) OJ L 145, 13.6.1977, p. 1. Directive as last amended by Directive

2006/18/EC (OJ L 51, 22.2.2006, p. 12).

C 270E/26

EN

Official Journal of the European Union

7.11.2006

(h) the existence of an after-sales guarantee,

if any, not

imposed by law;

(i) the price of the service, where a price is pre-determined by

the provider for a given type of service;

(j) the main features of the service,

if not already apparent

from the context;

(k) the insurance or guarantees referred to in Article 23(1), and
in particular the contact details of the insurer or guarantor
and the territorial coverage.

2. Member States shall ensure that the information referred
to in paragraph 1, according to the provider's preference:

(a) is supplied by the provider on his own initiative;

(b) is easily accessible to the recipient at the place where the

service is provided or the contract concluded;

(c) can be easily accessed by the recipient electronically by

means of an address supplied by the provider;

(d) appears in any information documents supplied to the reci-
pient by the provider which set out a detailed description
of the service he provides.

3. Member States shall ensure that, at the recipient's request,
providers supply the following additional information:

(a) where the price is not pre-determined by the provider for a
given type of service, the price of the service or, if an exact
price cannot be given, the method for calculating the price
so that it can be checked by the recipient, or a sufficiently
detailed estimate;

(b) as regards the regulated professions, a reference to the
professional rules applicable in the Member State of estab-
lishment and how to access them;

(c) information on their multidisciplinary activities and part-
nerships which are directly linked to the service in question
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;

(d) any codes of conduct to which the provider is subject and
the address at which these codes may be consulted by elec-
tronic means, specifying the language version available;

(e) where a provider is subject

to a code of conduct, or
member of a trade association or professional body which
provides for recourse to a non-judicial means of dispute
settlement, information in this respect. The provider shall
specify how to access detailed information on the charac-
teristics of, and conditions for,
the use of non-judicial
means of dispute settlement.

4. 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.

5.
The information requirements laid down in this Chapter
are in addition to requirements already provided for in Com-
munity law and do not prevent Member States from imposing
additional
information requirements applicable to providers
established in their territory.

6.
The Commission may, in accordance with the procedure
referred to in Article 40(2), specify the content of the informa-
tion 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 of
this Article.

Article 23

Professional liability insurance and guarantees

1. 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 appro-
priate to the nature and extent of the risk, or provide a guar-
antee or similar arrangement which is equivalent or essentially
comparable as regards its purpose.

2. 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 cover it provides in terms of the
insured risk, the insured sum or a ceiling for the guarantee and
possible exclusions from the cover, in another Member State in
which the provider is already established. Where equivalence is
only partial, Member States may require a supplementary guar-
antee to cover those aspects not already covered.

When a Member State requires a provider established in its
territory to subscribe to professional liability insurance or to
provide another guarantee, that Member State shall accept as
sufficient evidence attestations of such insurance cover issued
by credit institutions and insurers established in other Member
States.

3.
Paragraphs 1 and 2 shall not affect professional insurance
or guarantee arrangements provided for in other Community
instruments.

7.11.2006

EN

Official Journal of the European Union

C 270E/27

4.
For the implementation of paragraph 1, the Commission
may, in accordance with the procedure referred to in Article
40(2), establish a list of services which exhibit the characteris-
tics referred to in paragraph 1 of this Article 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 extent of the risk.

5.

For the purpose of this Article

— ‘direct and particular risk’ means a risk arising directly from

the provision 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,

the
prevention of substantial losses of money or of value of
property,

in relation to a recipient,

— ‘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 provi-
sion of the service.

Article 24

Commercial communications by the regulated professions

1. Member States shall remove all
commercial communications by the regulated professions.

total prohibitions on

2. Member States shall ensure that commercial communica-
tions by the regulated professions comply with professional
rules, in conformity with Community law, which relate, in par-
ticular, to the independence, dignity and integrity of the profes-
sion, as well as to professional secrecy, in a manner consistent
with the specific nature of each profession. Professional rules
on commercial communications shall be non-discriminatory,
justified by an overriding reason relating to the public interest
and proportionate.

Article 25

Multidisciplinary activities

1. 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 is necessary in order to
ensure their independence and impartiality;

(b) providers of certification, accreditation,

technical moni-
toring, test or trial services, in so far as is justified in order
to ensure their independence and impartiality.

2. Where multidisciplinary activities between providers
referred to in points (a) and (b) of paragraph 1 are authorised,
Member States shall ensure the following:

(a) that conflicts of

interest and incompatibilities between

certain activities are prevented;

(b) that the independence and impartiality required for certain

activities is secured;

(c) that the rules governing professional ethics and conduct for
different activities are compatible with one another, espe-
cially as regards matters of professional secrecy.

3.
In the report referred to in Article 39(1), Member States
shall indicate which providers are subject to the requirements
laid down in paragraph 1 of this Article, the content of those
requirements and the reasons for which they consider them to
be justified.

Article 26

Policy on quality of services

in cooperation with the Commis-
1. Member States shall,
sion, 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) certification or assessment of their activities by independent

or accredited bodies;

(b) drawing up their own quality charter or participation in
quality charters or labels drawn up by professional bodies
at Community level.

information on the
2. Member States shall ensure that
significance of certain labels and the criteria for applying labels
and other quality marks relating to services can be easily
accessed by providers and recipients.

3. Member States shall,
in cooperation with the Commis-
sion, take accompanying measures to encourage professional
bodies, as well as chambers of commerce and craft associations
and consumer associations, in their territory to cooperate at
Community level
in order to promote the quality of service
provision, especially by making it easier to assess the compe-
tence of a provider.

C 270E/28

EN

Official Journal of the European Union

7.11.2006

4. Member States shall,
in cooperation with the Commis-
sion, take accompanying measures to encourage the develop-
ment of independent assessments, notably by consumer asso-
ciations, in relation to the quality and defects of service provi-
sion, and, in particular, the development at Community level of
comparative trials or testing and the communication of the
results.

4. 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 thereof 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.

5. Member States,
in cooperation with the Commission,
shall encourage the development of voluntary European stan-
dards 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.

Article 27

Settlement of disputes

1. 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 telephone
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 cor-
respondence.

Member States shall take the general measures necessary to
ensure that providers respond to the complaints referred to in
the first subparagraph in the shortest possible time and make
their best efforts to find a satisfactory solution.

2. 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 provi-
sion of information and to demonstrate that the information is
accurate.

3. Where a financial guarantee is required for compliance
with a judicial decision, Member States shall recognise equiva-
lent guarantees lodged with a credit institution or insurer estab-
lished in another Member State. Such credit institutions must
be authorised in a Member State in accordance with Directive
2006/48/EC and such insurers in accordance, as appropriate,
with First Council Directive 73/239/EEC of 24 July 1973 on
the coordination of laws, regulations and administrative provi-
sions relating to the taking-up and pursuit of the business of
than
direct
and
Directive 2002/83/EC of the European Parliament and of the
Council of 5 November 2002 concerning life assurance (2).

assurance (1)

insurance

other

life

CHAPTER VI

ADMINISTRATIVE COOPERATION

Article 28

Mutual assistance — general obligations

1. Member States shall give each other mutual assistance,
and shall put in place measures for effective cooperation with
one another, in order to ensure the supervision of providers
and the services they provide.

2.
For the purposes of this Chapter, Member States shall
designate one or more liaison points, 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 liaison points.

Information requests and requests

3.
to carry out any
checks, inspections and investigations under this Chapter shall
be duly motivated, in particular by specifying the reason for
Information exchanged shall be used only in
the request.
respect of the matter for which it was requested.

In the event of receiving a request for assistance from
4.
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 informa-
inspections or investigations,
rapidly inform the

5.
tion or in carrying out checks,
the Member State in question shall
requesting Member State with a view to finding a solution.

(1) OJ L 228, 16.8.1973, p. 3. Directive as last amended by Directive
2005/68/EC of the European Parliament and of the Council (OJ L
323, 9.12.2005, p. 1).

(2) OJ L 345, 19.12.2002, p. 1. Directive as last amended by Directive

2005/68/EC.

6. 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.

7.11.2006

EN

Official Journal of the European Union

C 270E/29

7. Member States shall ensure that registers in which provi-
ders 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.

2.
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.

8. Member States shall communicate to the Commission
information on cases where other Member States do not fulfil
their obligation of mutual assistance. Where necessary,
the
Commission shall take appropriate steps, including proceedings
provided for in Article 226 of the Treaty, in order to ensure
that the Member States concerned comply with their obligation
of mutual assistance. The Commission shall periodically inform
Member States about the functioning of the mutual assistance
provisions.

3.
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
shall be carried out by the authorities of the Member State
where the provider is temporarily operating at the request of
the authorities of the Member State of establishment, in accord-
ance with Article 31.

Article 29

Article 31

Mutual assistance — general obligations for the Member
State of establishment

Supervision by the Member State where the service is
provided in the event of the temporary movement of the
provider

1. 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 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
2.
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.

3.
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 knowl-
edge, could cause serious damage to the health or safety of
persons or to the environment, the Member State of establish-
ment shall inform all other Member States and the Commission
within the shortest possible period of time.

Article 30

Supervision by the Member State of establishment in the
the temporary movement of a provider to
event of

another Member State

to national requirements which may be
1. With respect
imposed pursuant to Articles 16 or 17, the Member State
where the service is provided is responsible for the supervision
of the activity of the provider in its territory. In conformity
with Community law, the Member State where the service is
provided:

(a) shall take all measures necessary to ensure the provider
complies with those requirements as regards the access to
and the exercise of the activity;

(b) shall carry out the checks,

inspections and investigations

necessary to supervise the service provided.

2. With respect to requirements other than those referred to
in paragraph 1, where a provider moves temporarily to
another Member State in order to provide a service without
that
the competent authorities of
being established there,
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
3.
competent authorities of the Member State where the service is
provided shall carry out any checks, inspections and investiga-
tions necessary for ensuring the 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 authori-
ties may 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.

1. With respect to cases not covered by Article 31(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 par-
ticular through supervisory measures at the place of establish-
ment of the provider.

4.
On their own initiative, the competent authorities of the
Member State where the service is provided may conduct
inspections and investigations on the spot, provided
checks,
that those checks, inspections or investigations are not discri-
minatory, are not motivated by the fact that the provider is
established in another Member State and are proportionate.

C 270E/30

EN

Official Journal of the European Union

7.11.2006

Article 32

Alert mechanism

Article 34

Accompanying measures

1. 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 the territory of 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.

2.
in the
The Commission shall promote and take part
operation of a European network of Member States' authorities
in order to implement paragraph 1.

3.
in
The Commission shall adopt and regularly update,
accordance with the procedure referred to in Article 40(2),
the network
detailed rules concerning the management of
referred to in paragraph 2 of this Article.

Article 33

Information on the good repute of providers

the request of a competent
1. Member States shall, at
authority in another Member State, supply information,
in
conformity with their national law, on disciplinary or adminis-
trative actions or criminal sanctions and decisions concerning
insolvency or bankruptcy involving fraud taken by their
competent authorities in respect of the provider which are
directly relevant to the provider's competence or professional
reliability. The Member State which supplies the information
shall inform the provider thereof.

A request made pursuant to the first subparagraph must be
duly substantiated, in particular as regards the reasons for the
request for information.

2.
Sanctions and actions referred to in paragraph 1 shall
only be communicated if a final decision has been taken. With
regard to other enforceable 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.

The Commission,

1.
in cooperation with Member States,
shall establish an electronic system for the exchange of infor-
mation between Member States, taking into account existing
information systems.

2. Member States shall, with the assistance of the Commis-
sion, 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
relevant
in order

3.
multi-annual programme
exchanges of officials and training.

to organise

Article 35

Mutual assistance in the event of case-by-case derogations

to take a measure
1. Where a Member State intends
pursuant to Article 18, the procedure laid down in paragraphs
2 to 6 of this Article shall apply without prejudice to court
proceedings, including preliminary proceedings and acts carried
out in the framework of a criminal investigation.

2.
The Member State referred to in paragraph 1 shall ask the
Member State of establishment to take measures with regard to
the 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 oper-
ating 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.

3.
Following communication by the Member State of estab-
lishment as provided for in the second subparagraph of para-
graph 2, the requesting Member State shall notify the Commis-
sion 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;

3.
Implementation of paragraphs 1 and 2 must comply with
rules on the provision of personal data and with rights guaran-
teed 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.

(b) the reasons why it believes the measures it intends to take

fulfil the conditions laid down in Article 18.

The measures may not be taken until fifteen working

4.
days after the date of notification provided for in paragraph 3.

7.11.2006

EN

Official Journal of the European Union

C 270E/31

5. 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,
time, examine the
within the shortest possible period of
compatibility with Community law of the measures notified.

Where the Commission concludes that the measure is incompa-
tible 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.

6.
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 36

Implementing measures

In accordance with the procedure referred to in Article 40(2),
the Commission shall adopt the implementing measures neces-
sary for the implementation of this Chapter, specifying the
time-limits provided for in Articles 28 and 35 and the practical
arrangements for the exchange of information by electronic
means between Member States, and in particular the interoper-
ability provisions for information systems.

CHAPTER VII

CONVERGENCE PROGRAMME

Article 37

Codes of conduct at Community level

1. Member States shall,
in cooperation with the Commis-
sion, 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, in conformity with Com-
munity law.

Article 38

Additional harmonisation

The Commission shall assess, by … (*),
the possibility of
presenting proposals for harmonisation instruments on the
following subjects:

(a) access to the activity of judicial recovery of debts;

(b) private security services and transport of cash and valu-

ables.

Article 39

Mutual evaluation

1.
By … (**) at the latest, Member States shall present a
report to the Commission, containing the information specified
in the following provisions:

(a) Article 9(2), on authorisation schemes;

(b) Article 15(5), on requirements to be evaluated;

(c) Article 25(3), on multidisciplinary activities.

2.
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 of
receipt. Within the same period, the Commission shall consult
interested parties on those reports.

The Commission shall present

3.
the reports and the
Member States' observations to the Committee referred to in
Article 40(1), which may make observations.

4.
In the light of the observations provided for in para-
graphs 2 and 3, the Commission shall, by … (*) at the latest,
present a summary report to the European Parliament and to
the Council, accompanied where appropriate by proposals for
additional initiatives.

5.
By … (**) at the latest, Member States shall present a
report to the Commission on the national requirements whose
third subparagraph of
application could fall under
Article 16(1) and the first sentence of Article 16(3), providing
reasons why they consider that the application of those require-
ments fulfil the criteria referred to in the third subparagraph of
Article 16(1) and the first sentence of Article 16(3).

the

Thereafter, Member States shall transmit to the Commission
any changes in their requirements, including new requirements,
as referred to above, together with the reasons for them.

2. Member States shall ensure that the codes of conduct
referred to in paragraph 1 are accessible at a distance, by elec-
tronic means.

(*) Four years after the entry into force of this Directive.
(**) Three years after the entry into force of this Directive.

C 270E/32

EN

Official Journal of the European Union

7.11.2006

The Commission shall communicate the transmitted require-
ments to other Member States. Such transmission shall not
prevent the adoption by Member States of the provisions in
question. The Commission shall on an annual basis thereafter
provide analyses and orientations on the application of these
provisions in the context of this Directive.

Article 40

Committee procedure

1.

The Commission shall be assisted by a Committee.

2. Where reference is made to this paragraph, Articles 5 and
7 of Decision 1999/468/EC shall apply, having regard to the
provisions of Article 8 thereof.

The period laid down in Article 5(6) of Decision 1999/468/EC
shall be set at three months.

3.

The Committee shall adopt its rules of procedure.

Article 41

Review clause

The Commission, by … (*), and every three years thereafter,
shall present to the European Parliament and to the Council a
comprehensive report on the application of this Directive. This
report shall, in accordance with Article 16(4), address in par-
ticular the application of Article 16. It shall also consider the
need for additional measures for matters excluded from the
scope of application of this Directive. It shall be accompanied,
where appropriate, by proposals for amendment of this Direc-
tive with a view to completing the Internal Market for services.

Article 42

Amendment of Directive 1998/27/EC

In the Annex to Directive 1998/27/EC of the European Parlia-
ment and of the Council of 19 May 1998 on injunctions for
the protection of consumers' interests (1), 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 …)’.

Article 43

Protection of personal data

The implementation and application of this Directive and, in
particular, the provisions on supervision shall respect the rules

on the protection of personal data as provided for
Directives 95/46/EC and 2002/58/EC.

in

CHAPTER VIII

FINAL PROVISIONS

Article 44

Transposition

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive before … (**).

They shall forthwith communicate to the Commission the text
of those measures.

When Member States adopt these measures, they shall contain
a reference to this Directive or shall be accompanied by such a
reference on the occasion of their official publication. The
methods of making such reference shall be laid down by
Member States.

2. 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 45

Entry into force

This Directive shall enter into force on the day following that
of its publication in the Official Journal of the European Union.

Article 46

Addressees

This Directive is addressed to the Member States.

Done at Brussels, …

For the European Parliament

The President

…

For the Council

The President

…

(*) Five years after the date of entry into force of this Directive.
(1) OJ L 166, 11.6.1998, p. 51. Directive as last amended by Directive

2005/29/EC.

(**) Three years after the entry into force of this Directive.

7.11.2006

EN

Official Journal of the European Union

C 270E/33

STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

1. The Commission adopted its original proposal (1) on 13 January 2004 with the aim to provide a
legal framework that would eliminate the obstacles to the freedom of establishment for service
providers and the free movement of services between the Member States, giving both providers and
recipients of services the legal certainty they need in order to exercise these two fundamental free-
doms enshrined in the Treaty. The Proposal was examined and discussed extensively in the Council
and its preparatory bodies under successive Presidencies.

2. The Committee of the Regions delivered its Opinion on 30 September 2004 (2).

3. The European Economic and Social Committee delivered its Opinion on 10 February 2005 (3).

4. The European Parliament adopted its Opinion at first reading on 16 February 2006.

5. The Commission adopted its amended proposal on 4 April 2006. The amended proposal builds to

a large extent on Parliament's Opinion and on discussions held in the Council.

6. On 29 May 2006, the Council (Competitiveness) reached a political agreement, with the abstention
of Belgium and Lithuania, on a compromise text with a view to adopting its common position.

7. The Council adopted its common position in accordance with Article 251 of the EC Treaty on 24

July 2006.

II. OBJECTIVES

The objectives of the draft Directive are:

— To improve the basis for economic growth and employment in the EU.

— To achieve a genuine internal market in services by removing legal and administrative barriers to

the development and exercise of service activities.

— To strengthen the rights of recipients of services.

— To establish legally binding obligations for effective administrative co-operation between Member

States.

III. COMMON POSITION

The common position adopted by the Council reflects to a considerable degree the opinion of the
European Parliament at first reading. Most of Parliament's amendments were already incorporated in
the Commission's amended proposal, key elements of which have been incorporated in the common
position. Thus, a substantial number of Parliament's amendments have been reflected either in full or
in part in the common position. The common position also contains a certain number of new provi-
sions, which the Council considers to be essential in ensuring an efficient implementation of the Direc-
tive and contributing to the proper functioning of the internal market.

All modifications to the Commission's amended proposal introduced by the Council in its common
position have been accepted by the Commission.

(1) COM(2004) 0002.
(2) OJ C 43, 18.2.2005, p. 18.
(3) OJ C 221, 8.9.2005, p. 113.

C 270E/34

EN

Official Journal of the European Union

7.11.2006

Analysis of the Common Position

General provisions (Articles 1-4)

Specific areas of law (Article 1)

As regards the subject-matter of the Directive and its relationship with specific areas of law (funda-
mental rights, labour law, criminal law, the protection or promotion of cultural and linguistic diversity
and media pluralism) the common position largely reflects Parliament's amendments (7, 8, 9, 290,
291, 297, 298, 299, relevant part of 72). A new recital 10 is added to clarify a number of rules of a
general character that are independent from the access to or the exercise of a service activity. A
number of minor drafting changes in Article 1 aim at making its content more explicit and unambig-
uous.

Scope of application (Article 2)

In its common position, the Council has consolidated and further clarified the scope of application of
the Directive, taking account to a very large extent of the amendments adopted by Parliament at its
first reading. More precisely, the common position reflects the content of Parliament's amendments (in
particular Amendments 10, 13, 14, 15, 16, 17, 18, 19, 20, 44, 20, 70, 71, 73, 74, 78, 79, 80, 81, 82,
205, 206, 207, 208, 211, 212, 213, 232, 233, 252, 294, 295, 296, 300, 302/332, 302/333, 304,
305, 306, 403 and relevant parts of Amendments 72 and 289).

In Article 2(2)(a) the addition of the word ‘non-economic’ serves to clarify the term ‘services of general
interest’ which is not always used in a uniform manner by the Member States. Other rewording in
Article 2(2) (c), (f) and (i) aims at clarification and at meeting various concerns expressed by Member
States.

As far as the exclusion of social services concerned, in Article 2(2)(j) the common position refers to
social services relating to social housing, childcare and support of families and persons permanently or
temporarily in need which are provided by the State, by providers mandated by the State or by chari-
ties recognised as such by the State. The Council also added a new sentence in Recital 28 stressing that
the Directive should not affect the principle of universal service in Member States' social services.

The Council is not in a position to accept Amendment 75, since Recital 20 already contains the rele-
vant explanation of telecommunications services. Amendment 77 on the exclusion of legal services is
not taken on board given that Article 3 already provides that in case of a conflict between the provi-
sions 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.

Relationship between the Directive and other provisions of Community law (Article 3)

The common position follows the approach of Parliament's amendments 21, 83, 219, 307 subject to
minor redrafting in order to clearly state that in the event of a conflict with other relevant Community
instruments, the relevant provisions of those instruments shall prevail. Article 3(1) contains an indica-
tive list of such Community instruments. The common position also stresses in Article 3(2) that the
Directive does not concern rules of private international law, and in particular not those which guar-
antee that consumers benefit from the protection granted by the consumer legislation in force in the
Member States.

Definitions (Article 4)

The common position reflects the amendments 1-3, 5-6, 11, 23-26, 93-94, and 97-98 subject to
minor redrafting, 39, 84, 88 to 90, 95 and 308, in principle, but redrafted in order to make the text
consistent with existing Community legislation or with the scope of the Directive.

7.11.2006

EN

Official Journal of the European Union

C 270E/35

In addition, the common position has completed Recitals 37 and 40 and added a new Recital 38. The
Council has not taken on board amendments 4, 85 and 86 on definitions of ‘service’ and ‘public
service obligations’. Amendment 96, on the definition of ‘worker’, is considered redundant in relation
to the re-defined scope of application and is therefore not incorporated in the common position.
Amendment 92, with regard to the notion of ‘competent authorities’, and amendment 87, on the
notion of ‘provider’ are not taken on board for reasons of coherence with other relevant Community
legislation. Finally, the common position does not take on board amendment 22, deleting the list of
services covered by the Directive contained in Recital 33, which is reinstated, with minor drafting
modifications in order to reflect the amended scope of application.

Administrative simplification (Articles 5-8)

The common position largely reflects the relevant amendments of the European Parliament (27, 29-30,
31, 32, 33, 99, relevant parts of amendment 100, 104, 105-106 and 108-111, 309). In Article 6 (1),
by using the preposition ‘through’ instead of ‘at’, the Council seeks to clarify that the role of the points
of single contact may be limited to acting as an intermediary between the service provider and the
competent authorities.

The common position provides that the establishment of European forms will be carried out according
to the comitology procedure and adds a new Recital 45 which suggests a number of considerations
that Member States may take into account while examining the need for simplifying procedures and
formalities.

The Council has not been able to take on board certain amendments, which are considered not to be
in line with the Council's approach, such as amendment 102 since pro forma registration with the
points of single contact would be an unnecessary administrative burden, or amendment 103, because a
European point of single contact would represent an unnecessary administrative structure and would
be contrary to the principle of subsidiarity.

Amendment 310 has not been taken on board since a reference to the supervision of compliance with
Directive 96/71/EC, which is not affected by the present proposal, is not considered to be appropriate.

The common position does not incorporate amendment 107 since it would remove the obligation to
provide information by electronic means, which is an essential tool for administrative simplification,
amendment 111, apart from the revised timetable, or amendment 32 because electronic procedures
are an essential measure of administrative simplification and can also be used for original documenta-
tion since proof of authenticity can be provided by electronic means.

Freedom of establishment for providers (Articles 9-15)

The common position reflects amendments 34, 35, 36, 37, 38, 40, 41, 42, 112-113, 115 and 117,
118-122, 124-127, 128 and 129, part of amendments 30 and 130, 131-133 and 136-137, 138, 140,
141, 142 and 143, 144-145, 146, 147-149, 150 and 242. Minor drafting changes were considered
necessary in some cases for reasons of clarity and the Council believes that the substance of the Euro-
pean Parliament's amendments is not affected.

In Article 14(6) it is added that the prohibition of consultation of competing operators does not
concern consultation of the public at large and in Article 14(7) a Member State may require either
insurance or financial guarantees, although there is no such obligation for a provider established in
that Member State.

The common position does not take on board amendments 134 and 28 because tacit authorisation (in
the absence of a reply from the authorities) is key to facilitating the freedom of establishment, nor
amendment 135, because this would create an additional burden for the applicants and render judicial
review more difficult. In Article 13, the common position introduces some changes in paragraphs 3
and 4 and Recital 63 on tacit authorisation, in particular by allowing Member States to apply a time

C 270E/36

EN

Official Journal of the European Union

7.11.2006

extension for the procedure when this is justified by the complexity of the issue, and provided that the
applicant is duly informed of the extension and of the reasons therefore. This aims at making authori-
sation schemes transparent and duly accessible to economic operators, without depriving national
administrations of a certain margin of appreciation. An addition is made in Recital 63 to explain that
the possibility for Member States to put in place different arrangements for authorisation procedures
where justified by overriding reasons relating to the public interest can include rules providing that in
the absence of a response within a certain time period the application is deemed to have been rejected
and that such tacit rejection is open to challenge before the courts.

In Article 15(4), the common position introduces some changes concerning the application of the
evaluation process to services of general economic interest (SGEI), aiming at clarifying that the evalua-
tion mechanism provided for should not obstruct the performance of tasks assigned to services of
general economic interest and at meeting concerns of the European Parliament which preferred a total
exclusion of SGEI from the evaluation process. The common position contains a wording in Article
15(6) and (7) the purpose of which is to lighten the burden of Member States from the obligations
under this Article and to meet concerns by the European Parliament which wanted to go further by
deleting the notification obligation. In particular, the common position deletes from paragraph 6 the
phrase ‘and the need for it arises from new circumstances’. In paragraph 7, the common position adds,
for the purposes of legal certainty, a sentence explaining that the notification in accordance with Direc-
tive 98/34/EC will also fulfil the obligation of notification under this Directive.

The Council has not taken on board 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 common position specifies in a new Recital 58 that the reporting obli-
gation concerns only the existence of authorisation schemes and not the criteria and conditions for the
granting of an authorisation. The Council cannot accept amendment 114, considering that it would
make the text less clear.

Amendment 120 proposes a new Recital 61, which has been included in the common position for the
purpose of clarifying 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 fulfilled by the provider in another Member State. In addition, the common position reflects
the substance of amendment 121, but with a different wording. However, the common position does
not include amendment 122 because if decisions to grant an authorisation were to be excluded from
the obligation to state reasons, judicial review administrative decisions, in particular for third parties,
would become less effective or even virtually impossible. Likewise, the common position does not take
on board amendment 151, because deletion of the notification obligations would seriously affect the
evaluation process.

Freedom to provide services and related derogations (Articles 16-18)

Concerning the freedom to provide services (Article 16) the common position fully reflects the Euro-
pean Parliament's amendments (45 to 47, 152 and 293/rev4). A new Recital 82 is added to clarify the
application of Member States' rules on employment conditions. Concerning the additional derogations
from the freedom to provide services (Article 17) the Common Position takes on board the amend-
ments of Parliament (53, 48, 50, 51, 54, 161, 162, 163, 165, 169, 170, 171, 172, 173, 174 and 175,
400, 404) with a minor change in paragraph 12 on the shipment of waste. Article 18 of the original
proposal on transitional derogations has been deleted in line with the relevant Parliament amendment.

Amendments 164, 167 and 168 are not considered relevant following the changes in Article 16. The
Council has not taken on board amendment 176, because the case-by-case derogations relating to the
exercise of a health profession, the public health and to public policy are redundant as a result of the
exclusion of health services from the scope of application and the new wording of Article 16.

7.11.2006

EN

Official Journal of the European Union

C 270E/37

Rights of recipients of services (Articles 19-21)

Regarding the rights of recipients of services, the Common Position largely reflects the corresponding
Parliament amendments (178, 180, 247, 55 partly) with minor changes or additions.

However, the Council is not in a position to accept the addition of the word ‘solely’ (amendment 177)
to the non discrimination clause set out in Article 20, since this could be interpreted as allowing discri-
mination if based on other grounds. Amendment 179, providing for a new Article 22a, cannot be
taken on board since the Chapter on administrative simplification contains sufficient details on the role
of the points of single contact. Concerning the reimbursement of costs for healthcare received in
another Member State (Article 23 of the original proposal), the common position takes on board
amendments 56 to 62 and 180/247, deleting Article 23 and corresponding recitals.

As far as the provisions on posting of workers and posting of third country nationals (Articles 24 and
25 of the original proposal) are concerned, the common position follows the approach of Parliament
(amendments 181, 182/248, 63-64, 183/249 and 65-66) and deletes Articles 24 and 25 of the original
proposal.

Quality of services (Articles 22-27)

Regarding the provisions related to the quality of services, the common position largely reflects the
approach of Parliament (amendments 64, 67, 185, 187, 188, 190, 194, 195, 196). For reasons of
clarity, Article 22 regroups all information requirements provided for in other parts of the Directive.
Article 23 of the common position confirms that professional liability insurance is not mandatory. The
procedure in case of failure in the insurance market is not included, it being unnecessary since the
professional liability insurance is not mandatory anymore.

The common position does not incorporate amendments 184 and 186 since they would create an
unnecessary burden on service providers. Nor is amendment 191 taken on board because the relevant
information on after-sales guarantees must be provided to recipients by service providers. Amendment
192 cannot be accepted since the link with other Community legislation on after-sales guarantees has
to be explicitly mentioned. The common position does not take on board amendments 193 and 210
because the Council believes that the obligation to evaluate and report on restrictions on multidisci-
plinary activities is an essential measure for facilitating access to, and exercise of, service activities.

Administrative cooperation (Articles 28-36)

The common position reflects fully or the spirit of the corresponding amendments of the European
Parliament (in particular amendments 68-69, 197-198, 200-203) but with some restructuring, which
has been necessary following the new structure of the Chapter on the freedom to provide services.

Convergence programme and final provisions (Articles 37-46)

The common position incorporates, with minor redrafting, Parliament's amendments (in particular
amendments 70, 71, 205, 206, 207, 208, 211, 212, 213). A new Recital 114 is added to describe the
objective of the codes of conduct.

An important element introduced by the common position in Article 39(5), is a process by which
Member States shall present a report to the Commission on national requirements whose application
could fall under Article 16(1) third sub-paragraph and Article 16(3). The Commission shall communi-
cate these requirements to other Member States and provide analyses and orientations on their applica-
tion in the context of the Directive. The Council considers that this provision, which is a key element
of the overall balance of the agreed text, creates an efficient system of monitoring national legislation
that may constitute an obstacle to the freedom to provide services. Although under certain circum-
stances this obligation could create some initial burden for national administrations, it would neverthe-
less minimise administrative burden and costs for service providers and by helping Member States to
identify existing obstacles it would facilitate the implementation of the Directive.

C 270E/38

EN

Official Journal of the European Union

7.11.2006

In Article 40, the common position introduces a regulatory committee. The common position intro-
duces a new Article 43 on the protection of personal data. In Article 44(1), the common position takes
on board the Parliament's amendment and extends the implementation period to 3 years. The
common position also contains a new recital encouraging Member States to draw up tables to illustrate
the correlation between the Directive and the transposition measures.

IV. CONCLUSION

The Council considers that its common position, which is the result of extensive preparatory work and
negotiations since 2004 and which is fully supported by the Commission, is well in line with the
objectives of the proposed Directive. Thus, the common position seeks to establish a well defined legal
framework, which would enhance for both providers and recipients of services the legal certainty and
the ability to exercise the fundamental freedoms enshrined in the Treaty.

The Council has taken due account of Parliament's Opinion at first reading and of the Commission's
amended proposal. It notes that there is a significant convergence of positions between the three Insti-
tutions, in particular as regards the fundamental provisions of the draft Directive. This convergence is
well reflected in the common position.