COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on the legal and operational framework of the European services e-card introduced by Regulation ... [ESC Regulation] ...
Date: 2017-01-10
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: Internet, administrative formalities, application of EU law, expatriate worker, freedom to provide services, information system, professional qualifications, provision of services, service, single market

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   EUROPEAN COMMISSION  Brussels, 10.1.2017  SWD(2016) 438 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a Directive of the European Parliament and of the Council on the legal and operational framework of the European services e-card introduced by Regulation ... [ESC Regulation] ...  {COM(2016) 823 final} {SWD(2016) 437 final}  
 
 
Executive Summary Sheet 

Impact assessment on the proposal for a Directive of the European Parliament and of the Council 
on the legal and operational framework of the European services e-card 

A. Need for action 

Why? What is the problem being addressed?  
A  number  of  services  sectors  are  continuing  to  show  a  lack  of  internal  market  integration.  This  is  the  case  in 
particular  for  construction  services  and  several  business  services.  Firstly,  there  is  administrative  complexity 
when  service  providers  go  cross-border.  Secondly,  there  is  a  lack  of  well-structured  cooperation  mechanisms 
under  the  Services  Directive.  Thirdly,  SMEs  often  encounter  difficulties  to  access  the  required  insurance 
coverage for activities in other Member States. Finally, the regulatory environment across Member States is still 
highly  divergent  for  a  number  of  business  services.  As  a  result  of  these  drivers,  only  few  service  providers 
provide  services  cross-border  or  set  up  a  secondary  establishment.  Competition  on  these  markets  remains 
limited, leading to an inefficient allocation of resources, limited choice for consumers and high prices. Because of 
important  knock-on  effects,  underperforming  business  services  also  carry  an  important  cost  in  terms  of  the 
competitiveness  of the EU's industrial economy. Progress made by Member States  to implement the Services 
Directive  has  slowed  down  –  and  even  reversed  in  certain  instances  –  over  recent  years  with  no  signs  of 
recovery.  

What is this initiative expected to achieve?  
The general objectives of this initiative are to enhance market integration in business services and construction 
and improve productivity growth in both sectors. The specific objectives of this initiative are to:  

  Make it easier and less costly for companies to provide services in other Member States; 
 

Inspire  more  confidence  in  the  market  from  foreign  service  providers  by  increasing  transparency  and 
available information; 
Inject  increased  market  dynamics  and  competition  leading  to  more  choice  and  lower  prices  for 
customers, including industrial customers. 

 

What is the value added of action at the EU level?  
The  current  situation  is  characterised  by  insufficient  common  trust  between  national  authorities  and  strong 
vested  interests  at  national  level,  as  a  result  of  which  Member  States  continue  to  impose  their  domestic 
requirements on incoming service providers with little or no regard to the regulatory framework already applied to 
the  service  provider  in  their  home  country.  EU  action  would  ensure  that  service  providers  can  benefit  from  a 
consistent and coherent approach across Member States in expanding across borders. Action at EU level would 
also bring national authorities together and help increase trust between them. 

B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
choice or not? Why?  
A  range  of  policy  options  have  been  described  in  the  impact  assessment.  In  addition,  a  number  of  packages 
have been considered, combining these policy options: 
  Package 1 would allow the service provider to obtain a certificate regarding legal establishment in the home 
Member State and confirmation of existing insurance coverage for activities also in the home Member State;  
  Package 2 would allow the service provider to make use of an EU-level procedure to actually gain access to 
the  market  of  another  Member  State.  In  addition,  it  would  address  obstacles  related  to  insurance  in  cross-
border situations;  

  Package 3 would in addition to package 2 reduce regulatory disparity in a number of key business services 

through harmonisation of regulatory obstacles for foreign and domestic service providers;   

  Package 4 would in addition to package 3 introduce specific solutions to address regulatory disparities in the 
case of secondary establishment (branches and agencies), exempting foreign service providers from certain 
requirements while allowing the host Member State to introduce alternative safeguards.  

Package 2 is assessed as the preferred choice. 

Who supports which option?  
The Commission has engaged extensively with stakeholders and Member States over the past years. A majority 
of  stakeholders  from  the  business  services  sector,  whether being  service  providers,  business  organisations  or 
other organisations, expressed support for solutions taken at EU level to address barriers. Industrial customers 
of business services are also in favour of increasing the efficiency of the sector. A number of the stakeholders of 

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the construction sector had reservations, suggesting that construction is essentially local in nature.  

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise main ones)?  
Overall, package 2 is expected to have a positive and significant impact by reducing administrative barriers in a 
comprehensive way for cross-border service providers and providing additional information and transparency to 
consumers.  This  package  is  therefore  expected  to  lead  to  significant  cost  savings  for  service  providers  going 
cross-border. It is liable to generate an increase in market dynamics and competition levels, hereby increasing 
choice and value added for consumers. 

What are the costs of the preferred option (if any, otherwise main ones)?  
Package  2  is  not  expected  to  generate  additional  costs  for  service  providers  or  consumers.  The  European 
services e-card would not be mandatory for service providers, but rather a voluntary tool at their disposal in all 
Member States.  

How will businesses, SMEs and micro-enterprises be affected?  

The initiative is specifically targeted at SMEs since they are most impacted by administrative complexity when 
expanding  abroad.  It  will  provide  a  one-stop  shop  for  providers  in  the  sectors  of  business  services  and 
construction,  while  increasing  legal  certainty  about  the  requirements  applicable  to  them.  A  reduction  of 
administrative burden would allow them to save time and costs when going cross-border.  

Will there be significant impacts on national budgets and administrations?  
Package 2 would generate limited costs for Member States' authorities. These would not exceed 2 million EUR 
per year across all Member States. The existing Internal Market Information (IMI) system – set up, managed and 
funded by the Commission – would serve as the back office for the European services e-card.  

Will there be other significant impacts?  
Package  2  would  have  a  range  of  positive  impacts  related  to  reducing  administrative  burden  for  service 
providers,  improving  the  functioning  of  the  single  market,  increasing  competition  and  creating  more  choice  for 
consumers. It shall also enhance administrative cooperation between Member States authorities within a clear 
procedural  framework  with  a  view  to  facilitating  mutual  recognition  of  requirements  met  already  in  the  home 
Member State where applicable. 

D. Follow up 

When will the policy be reviewed?  
The  Commission  would  pursue  its  regular  dialogue  with  Member  States  and  stakeholders.  In  the  mid-to-long-
term Member States would be invited to evaluate the functioning of the initiative, involving also where applicable 
national social partners (in particular as regards the construction sector). An evaluation report could be issued 3 
years after the end of the transposition period. 

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