COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on the enforcement of the Directive 2006/123/EC on services in the internal market, laying down a notification procedure for authorisation schemes and requirements related to services, and amending Directive 2006/123/EC and Regulation (EU) No 1024/2012 on administrative cooperation through the Internal Market Information System
Date: 2017-01-10
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: administrative formalities, application of EU law, approximation of laws, disclosure of information, exchange of information, freedom to provide services, information system, right of establishment, service, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 10.1.2017  SWD(2016) 434 final   COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a  Directive of the European Parliament and of the Council on the enforcement of the Directive 2006/123/EC on services in the internal market, laying down a notification procedure for authorisation schemes and requirements related to services, and amending Directive 2006/123/EC and Regulation (EU) No 1024/2012 on administrative cooperation through the Internal Market Information System   {COM(2016) 821 final} {SWD(2016) 435 final}  
 
 
Table of Contents 
1.  Context and background .................................................................................................... 5 

1.1.  Scope ........................................................................................................................... 6 

1.2.  Legal context ............................................................................................................... 7 

1.2.1.  Services Directive ................................................................................................ 7 

1.2.2.  The Single Market Transparency Directive & other instruments ........................ 9 

1.3.  Economic context ...................................................................................................... 10 

2.  Problem definition ........................................................................................................... 11 

2.1. 
Ineffective notification procedure fails to prevent the introduction of unjustified and 
disproportionate regulatory barriers in services ................................................................... 11 

2.2.  The drivers of the problem ........................................................................................ 14 

2.2.1.  Driver 1 Limited possibilities to prevent disproportionate national regulation . 14 

2.2.2.  Driver 2 Ineffective Decision powers ................................................................ 15 

2.2.3.  Driver 3 Lack of thorough proportionality assessments .................................... 16 

2.2.4.  Driver 4 Limited scope of requirements covered by the current notification 
obligation ......................................................................................................................... 17 

2.2.5.  Driver 5 Unclear legal consequences when the notification obligation is not 
respected by Member States ............................................................................................ 19 

2.2.6.  Problem tree ....................................................................................................... 20 

2.3.  Who is affected, in what ways and to what extent? .................................................. 20 

2.3.1.  Services providers .............................................................................................. 20 

2.3.2.  Services recipients ............................................................................................. 21 

2.3.3.  National authorities ............................................................................................ 22 

2.4.  What is the EU dimension of the problem? .............................................................. 22 

2.5.  How would the problem evolve, all things being equal? .......................................... 22 

3.  EU right to act .................................................................................................................. 24 

3.1.  Does the EU have the right to act? ............................................................................ 24 

3.2.  What would be the added value of action at EU level? ............................................ 24 

3.3.  Consistency with other EU policies and with the Charter for fundamental rights .... 25 

4.  Objectives ........................................................................................................................ 27 

4.1.  General policy objectives .......................................................................................... 27 

4.2.  Specific policy objectives .......................................................................................... 27 

5.  Policy options................................................................................................................... 27 

2 

 
 
5.1.  Discarded Options ..................................................................................................... 27 

5.1.1. 

Including services in the Single Market Transparency Directive ...................... 27 

5.1.2.  Merging the obligation under the PQD with the notification obligation of 
Services Directive ............................................................................................................ 29 

5.1.3.  Services sectors outside the scope of the Services Directive ............................. 29 

5.2.  Policy Option 1: Baseline scenario: No EU policy change ....................................... 29 

5.3.  Policy Option 2: Non-legislative initiative (guidelines) ........................................... 30 

5.4.  Policy Option 3: Measures to increase the effectiveness and quality of the 
notification procedure .......................................................................................................... 30 

5.5.  Policy Option 4: Measure to expand the scope and improve coherence of the current 
notification system ............................................................................................................... 32 

5.6.  Policy Option 5: Additional instruments to guarantee compliance by Member States

33 

5.6.1.  Policy Option 5a: Instrument to clarify legal consequences of non-notification

33 

5.6.2.  Policy Option 5b: Instrument to render inapplicable adopted measures which 
are incompatible with the Services Directive .................................................................. 33 

5.7.  Choice of legal instrument ........................................................................................ 33 

6.  Analysis of impacts .......................................................................................................... 34 

Option 1: Baseline scenario ..................................................................................................... 34 

Option 2: Non-legislative initiative (guidelines) ................................................................. 35 

Option 3: Measures to improve the effectiveness and quality of the notification procedure .. 37 

Option 4: Measure to expand the scope and improve coherence of the current notification 
system ...................................................................................................................................... 41 

Option 5: Additional instruments to guarantee compliance by Member States ...................... 43 

7.  Comparison of options ..................................................................................................... 45 

7.1.  Comparison in terms of effectiveness, efficiency and coherence ............................. 45 

7.2.  Preferred option / Justification for no preferred option ............................................. 47 

7.3.  Subsidiarity and proportionality of the preferred option ........................................... 48 

8.  Monitoring and evaluation ............................................................................................... 49 

9.  Annexes............................................................................................................................ 51 

9.1.  Annex 1: Procedural information .............................................................................. 51 

9.1.1. 

Identification ...................................................................................................... 51 

9.1.2.  Organisation and timing ..................................................................................... 52 

9.1.3.  Consultation of the Regulatory Scrutiny Board ................................................. 52 

3 

 
 
 
 
9.1.4.  Studies to support the IA.................................................................................... 52 

9.2.  Annex 2: Stakeholder consultation ........................................................................... 52 

9.3.  Annex 3: Practical implications of the initiative for the affected parties: who is 
affected an how .................................................................................................................... 64 

9.4.  Annex 4: Estimation of costs for public authorities .................................................. 66 

9.5.  Annex 5: Evaluation report – notification procedure of the Services Directive ....... 73 

9.6.  Annex 6 : Glossary .................................................................................................... 96 

4 

 
 
 
 
 
1.  Context and background 

The objective of the Services Directive1 is to develop the single market for services to allow 
businesses  and  consumers  to  take  full  advantage  of  the  opportunities  stemming  from  an 
integrated  and  competitive  services  single  market.  On  the  basis  of  the  Directive,  service 
providers and recipients should benefit from a freedom of establishment and a freedom to 
provide  services  across  borders.  Generally,  the  Services  Directive  covers  both  purely 
domestic and cross-border situations. 

The Services Directive established that national rules restricting the right of establishment 
and the freedom to provide services falling under the Directive must be non-discriminatory, 
proportionate  and  justified  by  public  interest  objectives.  To  ensure  that  all  new  legal 
requirements  introduced  by  Member  States  fulfil  these  conditions,  the  Services  Directive 
provides  for  a  procedure  whereby  Member  States  shall  notify  new  or  changed  legal 
requirements affecting services. This allows for a verification of whether such requirements 
are justified, non-discriminatory and proportionate, thus preventing the introduction of new 
barriers  contrary  to  the  Services  Directive  and  contributing  to  a  more  integrated  and 
competitive single market for services. 

Commission  assessments  undertaken  in  2012  and  in  20152  have  shown  that  despite  a 
multitude  of  national  reforms  following  the  entry  into  force  of  the  Services  Directive  in 
2006,  many  national  barriers  remain  in  place  -  with  negative  impacts  for  businesses  and 
citizens. Some  of these barriers  are  due to measures newly  introduced  by Member States 
and which the existing notification procedure has not prevented. 

A  Commission  evaluation  of  the  existing  notification  procedure  contained  in  the  Services 
Directive was undertaken in 2015/2016 and revealed a number of important shortcomings 
(see Annex 5). These include limited possibilities to prevent disproportionate regulation, the 
limited  scope  of  requirements  covered  by  the  current  notification  obligation,  and  the 
absence of consequences of non-notification. Taken together, these shortcomings limit the 
effectiveness  of  the  existing  procedure  in  preventing  the  introduction  of  disproportionate 
regulatory  barriers.  A  stakeholder  consultation  undertaken  in  2016  highlighted  similar 
shortcomings (see Annex 2). 

Following its evaluation and in line with calls for policy action by the European Parliament3, 
the EU Council4 and the European Court of Auditors5, the Commission in its Single Market 

1 Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on Services in the 
Internal Market, OJ L376 of 27.12.2006, p.36 
2  Josefa  Monteagudo,  Aleksander  Rutkowski,  Dimitri  Lorenzani:  "The  economic  impact  of  the  Services 
Directive:  A  first  assessment  following  implementation";  European  Commission  Economic  Paper  456;  June 
2012; http://ec.europa.eu/economy_finance/publications/economic_paper/2012/pdf/ecp_456_en.pdf  
European  Commission: "Assessment  of  the  Economic  Impact  of  the  Services  Directive  –  Update  of  the  2012 
Study"; http://ec.europa.eu/growth/single-market/services/economic-analysis/index_en.htm  
3Draft report on the Single Market Strategy (2015/2354(INI)), Committee on the Internal Market and Consumer 
Protection,  

5 

 
 
                                                 
 
Strategy  adopted  on  28  October  20156  announced  a  legislative  proposal  to  improve  the 
delivery of the Services Directive by reforming its notification procedure. 

1.1. Scope 

The  objective  of  this  initiative  is  to  improve  the  enforcement  of  the  existing  EU  Services 
Directive  through  a  more  effective  and  efficient  notification  procedure.  The  scope  of  the 
initiative is therefore limited to the sectors falling under the Services Directive7. 

Services not covered by the Services Directive are in many cases subject to sector-specific 
EU  legislation  with  their  own  mechanisms,  meaning  it  is  not  necessary  and  would  be 
disproportionate to apply the notification procedure under the Services Directive to these 
sectors. 

initiative  will  not  touch  upon  national  measures  specifically  regulating 
This  policy 
information  society  services  covered  by  the  notification  obligation  under  Directive  (EU) 
2015/15358 (Single Market Transparency Directive, SMTD). As the SMTD is considered to be 
working  satisfactorily,  there  is  no  need  to  transfer  information  society  services  to  the 
procedure  under  the  Services  Directive.  This  being  said,  this  impact  assessment  in  places 
refers to the SMTD-system for comparison purposes. 

http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+COMPARL+PE-
573.011+01+DOC+PDF+V0//EN&language=EN  
Draft  report  on  Non-Tariff  Barriers  in  the  Single  Market  (2015/2346(INI),  Committee  on  the  Internal  Market 
and Consumer Protection 
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-
%2f%2fEP%2f%2fNONSGML%2bCOMPARL%2bPE-573.111%2b01%2bDOC%2bPDF%2bV0%2f%2fEN 
4 The Competitiveness Council called upon the Commission "to increase the effectiveness of the notification 
procedure  under  Directive  2006/123/EC,  including  by  providing  clear  guidance  as  to  the  notification 
obligations  and  making  notifications  public  and  transparent  as  is  the  case  for  goods".  Paragraph  15  of  the 
Council document 6197/15 adopted on 2 March 2015. 
5 The need for an improved notification mechanism was also highlighted by the European Court of Auditors in 
its report on the implementation of the Services Directive. Special report No 5/2016; published on 14 March 
2016. 
6 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social  Committee  and  the  Committee  of  the  Regions,  'Upgrading  the  Single  Market:  more  opportunities  for 
people and business' , COM(2015) 550 final, 28.10.2015,  
http://ec.europa.eu/DocsRoom/documents?locale=en&tags=single-market-strategy-2015-communication 
7 Excluded from the scope of Services Directive are financial services, electronic communications services with 
respect to matters covered by other EU instruments, transport services falling within the scope of Title VI of the 
Treaty on the Functioning of the European Union (TFEU), healthcare services provided by health professionals 
to assess, maintain or restore the state of patients' health where those activities are reserved to a regulated health 
profession, temporary work agencies' services, private security services, audio-visual services, gambling, certain 
social services provided by the State, by providers mandated by the State or by charities recognised by the State 
and services provided by notaries and bailiffs appointed by an official act of government. 
8 Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a 
procedure  for  the  provision  of  information  in  the  field  of  technical  regulations  and  of  rules  on  Information 
Society services (Text with EEA relevance) OJ L 241, 17.9.2015, p. 1 

6 

 
 
                                                                                                                                                        
1.2. Legal context 

1.2.1.  Services Directive 

According to the Services Directive, Member States have an obligation to notify legislative 
changes  affecting  the  freedom  of  establishment  (Article  15)  and  the  free  movement  of 
services  (i.e.  temporary  cross-border  service  provision  -  Articles  16  and  39(5))  to  the 
Commission and to the other Member States. 

The obligation regarding establishment is limited to a closed list of national requirements9, 
whereas  the  obligation  regarding  free  movement  of  services  covers  any  national 
requirements  unless  specifically  exempted  in  Article  17  of  the  Services  Directive10.  As 
regards  freedom  of  establishment,  the  scope  of  the  existing  notification  obligation  is  thus 
not fully aligned to the scope of the Services Directive. 

Member  States  must  according  to  Articles  15  and  16  assess  whether  the  requirement  in 
question  is  non-discriminatory  (i.e.  not  directly  or  indirectly  discriminatory  with  regard  to 
nationality or place of establishment), justified by an overriding reason relating to the public 
interest and proportionate (i.e. suitable to achieve the objective pursued, not going beyond 
what  is  necessary  to  attain  the  objective  and  not  replaceable  by  less  restrictive  means  to 
attain the same objective).11 

The Commission examines the compatibility of notified requirements with EU law, and may 
according  to  Article  15(7)  of  the  Services  Directive,  where  appropriate,  adopt  a  Decision 
requesting  the  notifying  Member  State  to  refrain  from  adopting  the  requirements  or  to 
abolish  already  adopted  national  measures.  The  possibility  for  the  Commission  to  issue 
Decisions, however, is limited to requirements affecting the freedom of establishment and 
does not cover requirements concerning temporary cross-border service provision. 

9 According to Article 15(2) Member States shall notify the following requirements: a) quantitative or territorial restrictions, 
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 Directive 2005/36/EC or provided for in other community acts, which reserve 
access to the service activity in question, e) ban on having more than one establishment in the territory of the same Member 
State,  f)  requirements  fixing  a  minimum  number  of  employees,  g)  fixed  minimum  and/or  maximum  tariffs  and  h)  an 
obligation on the provider to supply other specific services jointly. 
10  Article  16  shall,  according  to  Article  17,  not  apply  to  (1)  services  of  general  economic  interest  which  are  provided  in 
another  Member  State,  inter  alia:  a)  postal  services  covered  by  Directive  97/67/EC,  b)  electricity  services  covered  by 
Directive 2003/54/EC, c) gas services covered by Directive 2003/55/EC, d) water distribution and supply services and waste 
water  services  and    e)  treatment  of  waste,  (2)  matters  covered  by  Directive  96/71/EC  (posting  of  workers),  (3)  matters 
covered by Directive 95/46/EC (data protection). (4) matters covered by Directive 77/249/EEC (lawyers), (5) the activity of 
judicial recovery of debts, (6) matters covered by Directive 2005/36/EC (professional qualifications), (7) matters covered by 
Regulation  (EEC)  no  1408/71(social  security  schemes),  (8)  matters  covered  by  Directive  2004/38/EC  (administrative 
formalities  of  competent  authorities  in  Member  States  with  which  beneficiaries  must  comply),  (9)  possibilities  to  require 
VISA  or  residence  permit  for  third  country  nationals,  (10)  matters  covered  by  Regulation  (EEC)  no  259/93  (shipment  of 
waste)  and  (11)  copyright,  neighbouring  rights  and  matters  covered  by  Directive  87/54/EEC  and  Directive  96/9/EC,  (12) 
involvement of notaries, (13) matters covered by Directive 2006/43/EC (statutory audit of annual accounts and consolidated 
accounts, (14) registration of vehicles leased in another Member State and (15) rules linked to private international law. 
11 Article 15 (establishment) allows Member States to justify the introduction of new requirements with any of the overriding 
reasons related to public interest which have recognised by the Court of Justice, e.g. consumer protection and combatting 
fraud. However, according to Article 16 (free movement of services) Member States may only justify new requirements with 
public policy, public security, public health or the protection of the environment. 

7 

 
 
                                                 
Such  a  Decision  is  legally  binding  upon  the  Member  State  concerned.  Where  a  Member 
State does not comply with the Decision, the Commission may issue a letter of formal notice 
for  non-compliance  with  EU  law  in  the  context  of  an  infringement  procedure,  without 
previously  launching  an  EU  Pilot  procedure.  Where  a  Member  State  disagrees  with  a 
Decision  taken,  it  has  to  take  legal action  against  the  Commission  in  front  of  the  Court  of 
Justice of the European Union (hereinafter 'CJEU'). 

Freedom of establishment 

Free  provision  of 
services  

cross-border 

by 

Covered 
'notification 
obligation' in original  proposal 
'COM(2004)  2  for  a    Directive 
on  services 
internal 
market'12 

in  the 

the 
All  measures  affecting 
specific  freedom  covered  by 
the  notification  obligation  of 
the adopted Services Directive? 

What  needs  to  be  notified 
according 
Services 
Directive? 

the 

to 

Yes 

No  

No 

Yes 

Any new laws, regulations or 
administrative provision 

Any changes in requirements, 
including new requirements 

for  reaction 
Specific  period 
from  Commission  foreseen  in 
the Services Directive? 

a 
to 
Possibility 
Commission  Decision  foreseen 
in the Services Directive? 

adopt 

Reference 
notification 
to 
obligation  under  the  Single 
Market 
Transparency 
Directive? 

Yes, 3 months from date of receipt of 
the notification 

Yes 

Yes 

No 

No 

No 

Table presenting the differences between the notification obligation of freedom of establishment and the free 
provision of cross-border services covered by the Services Directive 

In  2007,  the  Commission  issued  a  Handbook  on  the  implementation  of  the  Services 
Directive. It aims to clarify inter alia the  scope of application of the Services Directive and 
the  various  obligations  provided  for  in  that  Directive.  It  also  contains  information  on  the 
application of the notification provisions. Further guidance was provided by the Commission 
at various meetings of the Expert Group on the implementation of the Services Directive13. 

12  Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  on  services  in  the  internal  market, 
COM(204) 2 final, 5.3.2004, 
 http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52004PC0002&from=EN 

Handbook 

13 
(2007), 
http://ec.europa.eu/internal_market/services/docs/services-dir/guides/handbook_en.pdf,  Expert  group  on  the 
implementation of the Services Directive meetings of 23 April 2013, 25 March 2014 and 25 January 2016. 

implementation 

Directive 

Services 

the 

the 

on 

of 

8 

 
 
 
 
 
                                                 
 
EXISTING NOTIFICATION PROCEDURE UNDER THE SERVICES DIRECTIVE 

The  notifying  Member  State  directly  uploads  a  notification  into  the  Internal  Market 
Information system (IMI) containing the following information: 

• 

• 

• 

• 

• 

• 

• 

Level of requirement imposed (national, regional, local). 

Status of the act with date (or expected date) of entry into force 

Specific provision/article in the act that contains the notified requirement 

Services activity/ies to which the notified requirement applies 

Type of requirement and brief description 

Indication of the justification and detailed statement of ground 

Proportionality analysis 

All other Member States and the Commission are informed via an automatic e-mail of the 
notification  and  of  any  subsequent  document  uploaded  into  the  system.  Other  Member 
States  and  the  Commission  can  upload  comments  and/or  questions  on  the  respective 
notification in IMI. The notifying Member State is invited to consider these comments and 
to respond to them again via IMI. 

The  IMI  system  closes  the  notification  after  3  months  from  the  date  of  the  receipt  of  the 
translation of the original notification.  

1.2.2.  The Single Market Transparency Directive & other instruments 

The  notification  obligation  established  under  the  Services  Directive  complements  a 
previously  existing  notification  obligation  established  by  Directive  (EU)  98/34  –  now 
replaced  by  the  Single  Market  Transparency  Directive  (SMTD)  (EU)  2015/1535  –  which 
establishes a notification obligation for new or changed requirements in the areas of goods 
and information society services.14 

The  notification  procedure  established  under  the  SMTD  consists  of  the  communication  by 
Member  States  of  draft  technical  regulations  to  the  Commission  and  the  non-adoption  of 
notified drafts thereof during a "standstill period". The Commission and Member States can 
issue  comments  and  "detailed  opinions",  which  should  be  taken  into  account  by  the 
notifying  Member  State.  The  "detailed  opinions"  prolong  the  initial  "standstill  period". 
Under  the  case  law  of  the  CJEU,  in  case  the  notification  procedure  is  not  completed  by  a 
Member State, the technical regulations in question are inapplicable by national authorities 
such as administration and judges. The notification system established by the SMTD ensures 
the  transparency  of  notifications  to  stakeholders,  which  can  gain  access  to  notifications 
through an on-line tool. 

14  A  regulatory  measure  notified  under  the  Transparency  Directive  does  not  need  to  be  renotified  under  the 
Services Directive (Article 15(7), second paragraph of the Services Directive) 

9 

 
 
                                                 
The  revised  Professional  Qualifications  Directive  2005/36/EC  includes  an  obligation  for 
Member  States  to  report  changes  made  to  their  list  of  regulated  professions.  Member 
States  also  have  to  provide  every  two  years  a  report  to  the  Commission  about  the 
requirements which have been removed or made less stringent. Moreover, Member States 
shall  provide  the  Commission  with  information  on  requirements  they  introduced  and  the 
reasons  for  considering  that  those  requirements  are  compatible  with  the  Professional 
Qualifications Directive, within six months of the adoption of the measure introducing such 
requirements. 

1.3. Economic context 

The EU economy is predominantly a  services-based economy with services accounting for 
71%  of  EU  GDP  and  68%  of  EU  employment  (excluding  government  and  public  services). 
Services  sectors  falling  within  the  scope  of  the  Services  Directive  (which  among  others 
excludes  sectors  such  as  financial  services,  transport  services,  telecommunication  services 
and health services) amount to 46% of EU GDP.15 

The Services Directive and national reforms adopted following its entry into force until 2014 
are  estimated  to  yield  0.9%  EU  GDP  growth  over  ten  years.16  A  more  ambitious 
implementation of the Services Directive could yield up to 1.7% EU GDP growth in addition 
to what has been achieved so far.17  

Reform  progress  has  slowed  in  recent  years  and  reforms  to  abolish  or  reduce  barriers  in 
services  have  been  undertaken  by  a  limited  number  of  Member  States  only.18  Some 
Member  States  have  introduced  important  new  restrictions,  while  other  Member  States 
backtrack  on  previous  reform  measures  or  introduce  new  barriers  to  limit  the  effects  of 
previous  reforms.  Realising  the  1.7%  GDP  growth  potential  will  depend  on  both,  Member 
States  removing  existing  obstacles  and  refraining  from  introducing  disproportionate 
restrictions that undo the positive impact of reforms. 

Economic assessments1920 show that reducing regulatory barriers in, for example, business 
services would generate more intensive competition as a result of more firms entering the 
market. It would also lead to benefits for consumers in terms of, for example, lower prices 
(inter alia as a result of reduced profit rates), wider choice or better quality. Lower market 
access  barriers  would  additionally  lead  to  more  performant  sectors  characterised  by  a 

15 Eurostat, National Accounts Statistics, 2013 
16  Josefa  Monteagudo,  Aleksander  Rutkowski,  Dimitri  Lorenzani:  "The  economic  impact  of  the  Services 
Directive:  A  first  assessment  following  implementation";  European  Commission  Economic  Paper  456;  June 
2012; http://ec.europa.eu/economy_finance/publications/economic_paper/2012/pdf/ecp_456_en.pdf  
17 European Commission: "Assessment of the Economic Impact of the Services Directive – Update of the 2012 
Study"; http://ec.europa.eu/growth/single-market/services/economic-analysis/index_en.htm  
18 ibid 
19  European  Commission:  "Business  services  –  Assessment  of  Barriers  and  their  Economic  Impact"; 
http://ec.europa.eu/growth/single-market/services/economic-analysis/index_en.htm  
20  Eric  Canton,  Daria  Ciriaci,  Irune  Solera:  The  Economic  Impact  of  Professional  Servcies  Liberalisation; 
European 
2014; 
Economic 
http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp533_en.pdf  

Commission 

September 

Paper 

533; 

10 

 
 
                                                 
stronger allocative efficiency. Organisations like the OECD, the World Bank and the IMF have 
carried out studies coming to similar results.21 

2.  Problem definition 

2.1. Ineffective notification procedure fails to prevent the introduction of 
unjustified and disproportionate regulatory barriers in services 

The objective of the notification procedure introduced in the 2006 Services Directive was to 
contribute 
implementation  by  preventing  new  unjustified  and 
disproportionate  regulatory  barriers  from  being  adopted  by  Member  States,  causing  new 
obstacles in the services single market. 

its  effective 

to 

The  procedure  was  designed  as  an  enforcement  tool  whereby  the  compliance  of  new 
regulatory  measures  with  EU  law  would  be  verified.  This  would  avoid  costly  and  lengthy 
legal proceedings between the Commission and Member States for newly adopted national 
laws  failing  to  comply  with  EU  law  (infringement  proceedings)  and  regulatory  uncertainty 
and  unpredictability  stemming  from  frequently  changing  regulation  (e.g.  where  a  recently 
introduced  measure  would  have  to  be  amended  again  as  a  result  of  an  infringement 
procedure). 

The  need  for  an  effective  notification  procedure  is  confirmed  by  the  fact  that  Member 
States continuously review and adjust their services regulation as they take account of new 
market developments (e.g. emergence of collaborative economy) and policy objectives (e.g. 
energy  certification  requirements  contributing  to  climate  change  objectives).  As  a  result, 
Member States notified a total of 1639 newly introduced regulatory measures between the 
deadline for the implementation of the Services Directive at the end of 2009 and the end of 
2015. 

However, an evaluation of the existing notification procedure shows that its initial objective 
has  not  been  met.  This  is  confirmed  by  the  results  of  the  public  consultation  undertaken 
(see Annex 2). 

One  main  problem  is  that  not  all  Member  States  fulfil  the  notification  obligation:  five 
Member States did not notify any regulatory measure between the end of 2009 and the end 
of 2015. An additional 10 Member States notified ten or less regulatory measures over this 
period.  At  the  same  time,  the  top  seven  notifying  Member  States  account  for  86%  of  all 
notifications (see Annex 5). 

As  to  the  reasons  why  Member  States  are  not  notifying,  discussions  with  representatives 
from  Member  States  held  both  bilaterally  and  multilaterally  in  the  expert  group  on  the 
implementation  of  the  Services  Directive  pointed  to  a  lack  of  awareness  of  the  obligation 

21 OECD: Services Trade and Domestic Regulation, 2007; 
OECD: Service Regulation and Growth: Evidence from OECD countries, 2010 
World Bank: EU Regular Economic Report 3: Growth, Jobs and Integration: Services to the Rescue; 2016 
IMF: The EU Services Directive: Gains from Further Liberalization; IMF Working Paper WP/14/113; 2014 

11 

 
 
                                                 
and  absence  of  standard  practices,  especially  among  regional  public  authorities.  A  lack  of 
any clear consequences in case of non-notification moreover fails to provide incentives for 
Member  States  to  comply  with  the  obligation.  The  absence  of  any  consequence  of  non-
notification  implies  a  perverse  incentive.  Notifying  Member  States  will  have  their  notified 
measures  subject  to  review  by  the  Commission  and  other  Member  States,  whereas  non-
notifying Member States do not. 

The  Commission  has  undertaken  a  number  of  initiatives  to  ensure  Member  States' 
compliance  with  the  notification  obligation  in  the  Services  Directive.  Thus,  it  has  issued  a 
Handbook to explain to Member States how to comply with the Services Directive. Within 
the  context  of  the  Expert  Group  on  the  implementation  of  the  Services  Directive  the 
Commission  also  regularly  presented  data  on  notifications  received,  naming,  shaming  and 
faming Member States. It moreover organised discussions  among Member States to share 
experience  and  best  practice,  and  approached  non-notifying  Member  States  bilaterally  to 
encourage notifications. 

Beyond  this,  however,  the  possibilities  for  the  Commission  to  enforce  the  notification 
obligation  are  limited.  It  is  general  Commission  policy  not  to  open  legal  action  against 
Member  States  for  non-compliance  with  procedural  obligations,  unless  there  are 
substantive grounds, i.e. an infringement on substance with EU law. Only in such cases will 
the  Commission  in  its  infringement  action  addressing  the  substance  of  the  non-notified 
requirement  also  add  a  point  on  the  non-compliance  with  procedural  obligations.  One 
reason for this is that, in the absence to notify national laws at draft stage, Member State 
may  always  rapidly  notify  a  requirement  to  prevent  the  Commission  from  adopting  legal 
action solely for non-notification. 

Beyond  non-notification,  the  main  underlying  reasons  why  the  existing  procedure  has  not 
met its objective are set out in the sub-sections below (problem drivers). 

As a result of the identified shortcomings, existing notifications and complaints received by 
the  Commission  show  that  Member  States  have  introduced  new  regulatory  requirements 
that  have  not  met  the  non-discrimination, 
justification  and  proportionality  criteria 
established by the Services Directive. This is illustrated by the fact that from 2009 to 2015 
the  Commission  had  to  initiate  30  EU  Pilot  cases22  against  Member  States  for  newly 
introduced  regulatory  measures  which  the  Commission  considered  not  to  be  compatible 
with  EU  law.  This  represents  27%  of  all  EU  Pilot  cases  related  to  the  Services  Directive 
initiated by the Commission over this period, with this share continuously rising: in 2015 the 
EU Pilot cases against newly introduced regulatory measures represented 40% of all EU Pilot 
cases initiated under the Services Directive (based on complaints, own-initiative cases and 
notifications).  This  is  evidence  of  regulatory  requirements  being  introduced  by  Member 

22 EU Pilot is a Commission initiative aimed at asking Member States to answer questions and to find solutions 
to problems concerning the application of Union law. It is supported by an online database and communication 
tool. Through the dialogue in EU Pilot, the Commission and Member States solve problems more quickly and 
compliance with Union law obligations is achieved to the benefit of the public and businesses. 

12 

 
 
                                                 
States  into  their  national  legislation  that  raise  important  concerns  over  their  compliance 
with the Services Directive. 

Mechanisms  such  as  the  mutual  evaluation  process  (2010-11),  performance  checks  (2011-
12)  and  peer  review  (2012-2013)23  have  not  reduced  the  need  to  ensure  an  effective 
notification  procedure  as  they  focussed  on  the  reduction  of  existing  regulatory  barriers 
rather than the prevention of new unjustified and disproportionate regulatory measures. 

In  comparison,  the  notification  obligation  under  the  Single  Market  Transparency  Directive 
(SMTD)  applying  to  information  society  services  and  goods  is  an  example  of  a  mechanism 
more  effectively  preventing  new  barriers  from  being  introduced.  This  is  confirmed  by  a 
calculation undertaken by CEPS24, which developed an effective prevention indicator (EPI)25 
that measured the ability of the SMTD-system to prevent barriers to intra-EU goods trade. 
Amounting to 9.7% in 2010 and 11.7% in 2011 for the SMTD, the indicator shows that the 
SMTD  prevented  a  number  of  national  measures  from  being  adopted,  which  would  have 
been  harmful  to  the  proper  functioning  of  the  Single  Market  for  goods  and  information 
society  services.  CEPS  did  not  extend  the  indicator  to  also  cover  the  services  notification 
procedure, the potential impact of which, however, is likely to be larger than in the area of 
goods  which  are  subject  to  harmonised  EU  rules  and  the  application  of  the  mutual 
recognition principle in a way that is not the case in services.26 

Several  studies  show  the  negative  economic  effects  of  restrictive  regulatory  barriers  in 
services markets. Thus, the Commission27 28 using econometric modelling has established a 
causal link between restrictive regulatory barriers and reduced competitiveness as a result 
of  lower  market  dynamics  (less  firms  entering  and  exiting  the  market)  and  reduced 

23  Communication  from  the  Commission  to  European  Parliament,  the  Council,  the  European  Economic  and 
Social Committee and the Committee of the Regions, Towards a better functioning Single Market for services – 
building  on  the  results  of  the  mutual  evaluation  process  of  the  Services  Directive,  27.1.2011,  COM(2011)  20 
final. Commission Staff Working document on the result of the performance checks of the internal market for 
services (construction, business services and tourism), Accompanying the document Communication from the 
Commission to the European Parliament, the Council, the European Economic and Social Committee and the 
Committee  of  the  Regions  on  the  implementation  of  the  Services  Directive,  A  partnership  for  new  growth  in 
services 2012-2015, 8.6.2012, SWD(2012) 147 final. Commission Staff Working document on the outcome of 
the peer review on legal form, shareholding and tariff requirements under the Services Directive, accompanying 
the document Communication from the Commission to the European Parliament, the Council and the European 
Economic  and  Social  Committee  on  Evaluating  national  regulations  on  access  to  professions,  2.10.2013, 
SWD(2013) 402 final. 
24  CEPS  Policy  Brief,  "Pre-empting  Technical  Barriers  in  the  Single  Market",  Anabela  Correia  de  Brito  and 
Jacques Pelkmans, No. 277, 11 July 2012. 
25 The basis for the calculation is the gross prevention indicator i.e. the ratio of the sum of the comments and 
detailed  opinions  of  one  year,  divided  by  the  total  number  of  notifications  which  is  then  filtered  to  eliminate 
double counting due to the fact more than one Member State can have a detailed opinion on the same notified 
draft law and/or that a Member State and the Commission may file a detailed opinion on the same draft law. 
26 This is the only available data on preventive enforcement. Data on enforcement (focussed on EU Pilot cases 
and infringement proceedings) only provide information on the length of procedures. No indications are given in 
respect of the cost related to such proceedings or the possible impact they could have on businesses. 
27  European  Commission:  The  economic 
http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp533_en.pdf  
28  'Business  services  –  Assessment  of  Barriers  and  their  Economic  Impact',  http://ec.europa.eu/growth/single-
market/services/economic-analysis/index_en.htm  

liberalisation;  September  2014, 

impact  of 

services 

13 

 
 
                                                 
allocative  efficiency  rates,  and  increases  in  consumer  prices.  These  studies  are  of  direct 
relevance to this initiative given that the shortcomings in the existing notification procedure 
mean it is unable to prevent the introduction by Member States of the restrictive regulatory 
requirements that these studies have proven to be economically harmful. 

2.2. The drivers of the problem 

2.2.1.  Driver  1  Limited  possibilities  to  prevent  disproportionate  national 

regulation 

The effectiveness of the current notification procedure suffers from limited possibilities to 
prevent the introduction of disproportionate national regulation. This is principally for two 
reasons. 

Firstly, there is no obligation for Member States to notify draft regulations rather than those 
that  have  already  been  adopted. 
In  the  period  between  the  deadline  for  the 
implementation of the Services Directive at the end of 2009 and the end of 2015 only 13% 
of notified regulatory measures were at draft stage and not yet adopted. Only in these cases 
could comments from the Commission and other Member States on the notified act still be 
taken  into  account  in  the  legislative  process.  The  13%  of  draft  notifications  originated 
primarily from four Member States. 

In 87% of all notified measures the only option for the Commission to address unjustified or 
disproportionate  regulatory  measures  was  thus  to  revert  to  administratively  heavy  and 
resource-  and  time-consuming  enforcement  actions  (EU  pilot  cases  and  infringement 
procedures) (see Annex 5 for detail). 

By  comparison,  the  notification  system  under  the  Single  Market  Transparency  Directive 
(SMTD)  obliges  Member  States  always  to  notify  draft  measures.  This  allowed  the 
Commission in 2014 to issue 62 detailed opinions on draft measures notified while limiting 
the number of infringement proceedings that needed to be opened to one. 

Secondly, the existing notification procedure does not give external stakeholders access to 
notifications.  This  limits  the  opportunities  to  hear  views  of  stakeholders,  which  could 
provide  valuable  input  for  an  assessment  of  the  justification  and  proportionality  of 
regulatory measures. 

A  comparison  to  the  SMTD  is  again  illustrative.  The  latter  allows  for  all  interested  parties, 
including non-institutional stakeholders, to be informed of notifications and to comment on 
them. Each year, stakeholders provide between 300 and 400 comments on the 600 to 700 
measures  notified  under  the  TRIS  system  that  is  used  for  the  SMTD.  This  confirms  a 
considerable interest from stakeholders. The public consultation on the services notification 
procedure  confirmed  a  similar  stakeholder 
interest  with  nearly  three  quarters  of 
respondents supporting increased transparency (see Annex 2). Also the response from the 
public authorities was positive with 60% in favour. 

14 

 
 
2.2.2.  Driver 2 Ineffective Decision powers 

Regulatory requirements  which  concern  the  freedom  of  establishment are  notified  on  the 
basis  of  Article  15(7)  of  the  Services  Directive.  Where  the  Commission  believes  that  the 
notified measure is not in line with the requirements of the Services Directive, it may on the 
basis of Article 15(7) adopt a Commission Decision requesting the Member State in question 
to refrain from adopting the notified measure or (where it is already adopted) to abolish it. 

Until  today,  the  Commission  has  not  made  use  of  the  possibility  to  adopt  a  Commission 
Decision.  This  is  because  the  existing  design  of  the  notification  procedure  makes  it 
impossible in practice for the Commission to adopt a Decision. Under the Services Directive, 
the  adoption  of  a  Decision  must  take  place  within  three  months  after  the  date  of  the 
notification  of  a  regulatory  requirement.  A  Decision  must  be  preceded  by  a  dialogue 
between  the  Commission  and  the  notifying  Member  State.  In  practice,  it  is  not  possible 
within  this  time-span  for  the  Commission  to  analyse  the  incoming  notification,  to  hold  a 
dialogue  with  the  notifying  Member  State  on  this  notification  and  to  complete  applicable 
procedures leading up to the adoption of a Decision. Experience with the existing procedure 
shows  that  in  particular  the  organisation  of  a  meaningful  dialogue  between  the  notifying 
Member  State,  the  Commission  and  other  Member  States  on  the  substance,  merits  and 
justification of a notified measure requires an adequate timeframe. 

Notifications  which  concern  the  freedom  to  provide  services  cross-border  on  a  temporary 
basis are notified on the  basis of Article  39 of the  Services Directive. This Article does not 
contain the possibility for the Commission to adopt a Decision requesting the Member State 
in question to refrain from adopting the notified measure or (where it is already adopted) to 
abolish  it.  The  only  possible  option  available  to  the  Commission  is  opening  enforcement 
action (EU Pilot and infringement proceedings) where it believes that a notified requirement 
is not in conformity with EU law. 

Pursuing EU Pilots and infringement proceedings, however, requires considerable time and 
resources for both, national authorities and the Commission. Infringement proceedings take 
on  average  29  months,  while  the  time  necessary  for  a  Decision  procedure  is  fixed  at  3 
months to prepare the Decision. 

While  the  possibility  to  adopt  a  Decision  is  thus  limited  to  notifications  that  concern  the 
freedom  of  establishment  and  does  not  extend  to  the  freedom  to  provide  services  cross-
border on a temporary basis, 86% of regulatory measures notified between the end of 2009 
and the end of 2015 concern the temporary provision of services cross-border. Of the total 
notifications  received  in  2010-2015,  226  concern  establishment  requirements,  whereas 
1413  concern  requirements  affecting  temporary  cross-border  services  or  both  temporary 
cross-border  services  and  establishment  cases.  This  shows  that  under  the  present 
notification procedure in only a minority of cases is the Commission actually in a position to 
adopt  a  Decision  to  prevent  the  introduction  of  a  national  regulatory  requirement  that 
contradicts the existing Services Directive. 

15 

 
 
The ineffectiveness of the existing Decisions instrument was also highlighted by respondents 
to  the  public  consultation:  80%  of  respondents  agreed  that  the  current  system  is  not 
adequate  to  prevent  the  adoption  of  disproportionate  restrictions  by  Member  States  and 
called  to  extend  the  possibility  for  Decisions  to  also  cover  notified  measures  concerning 
temporary cross-border services provision. 

2.2.3.  Driver 3 Lack of thorough proportionality assessments 

As  per  Articles  15  and  16  of  the  Services  Directive,  Member  States  may  maintain  certain 
regulatory  requirements  even  where  they  constitute  obstacles  to  the  freedom  of 
establishment  and  the  freedom  to  provide  services,  provided  they  assess  and  show  these 
are  non-discriminatory,  justified  by  an  overriding  public  interest  and  proportionate.  The 
corresponding  assessment  is  thus  key  to  establishing  whether  a  regulatory  measure  is 
permissible or not. 

Indeed,  Member  State's  assessments  confirming  the  proportionality  of  a  requirement  are 
central  to  the  policy  approach  to  the  services  single  market,  given  limited  regulatory 
harmonisation and the limited application of the mutual recognition principle (especially as 
compared  to  the  goods  sector).  It  is  particularly  important  for  certain  sectors,  such  as 
regulated professions, retail and construction, as highlighted in the Single Market Strategy. 

Despite  the  importance  of  the  assessment  of  the  justification  and  proportionality  of 
regulatory measures, the current notification procedure does not contain a clear obligation 
justification  and 
for  Member  States  to  provide  a  substantive  assessment  of  the 
proportionality  of  a  regulatory  measure  as  part  of  their  notification.  Member  States  must 
indicate whether the notified measure is proportionate, but they do not need to furnish any 
assessment showing how this is the case. 

In practice, the information provided in the notification procedure is often not sufficient for 
a  proper  assessment  of  the  justification  and  proportionality  of  measures  notified  by 
Member States (see Annex 5). This shortcoming was also highlighted by many stakeholders 
during the public consultation: nearly half (45%) asserted that the assessment by Member 
States  whether  national  legislation  is  justified  and  proportionate  to  meet  public  policy 
objectives is insufficient. 

An evaluation of the notifications received in 2014 and 2015 shows that approximately 50% 
of all received notifications did not include substantive information on the justification and 
proportionality  of  the  notified  requirement,  with  many  assessments  not  going  beyond  a 
standard  phrase  stating  that  the  notified  requirement  is  proportionate  to  achieving  the 
desired  public  interest  objective  and  does  not  impose  excessive  restrictions.  For  other 
notifications  received,  Member  States  provide  information  allowing  at  least  for  a  partial 
understanding how and in what way the notified measure is justified and proportionate to 
reach identified public interest objectives. 

16 

 
 
2.2.4.  Driver  4  Limited  scope  of  requirements  covered  by  the  current 

notification obligation 

The current notification obligation for requirements affecting temporary provision of cross-
border  services  is  much  wider  and  more  substantial  than  the  obligation  for  requirements 
affecting  the  freedom  of  establishment.  According  to  the  Services  Directive,29  all 
requirements  affecting  temporary  cross-border  service  provision  (such  as  reporting 
obligations,  authorisation  schemes,  minimum  number  of  employees,  requirements  on 
insurance, etc.) should be notified, unless they concern services which are not covered by 
the exemptions in the Directive (e.g. services of general economic interest, matters related 
to posting of workers and professional qualifications)30. 

On the other hand, the notification obligation for establishment requirements is limited to a 
closed  list  of  requirements  in  the  Directive.31  This  approach  stems  from  the  original 
Commission  legislative  proposal  for  the  Services  Directive  and  changes  introduced  by  the 
legislator  prior  to  its  adoption.  The  original  Commission  legislative  proposal  limited  the 
notification obligation to a number of establishment requirements defined in Article 15 of 
the  Directive.  It  did  not  extent  to  all  establishment  requirements  and  did  not  cover  the 
temporary provision of cross-border services at all. The latter had not been foreseen in the 
Commission legislative proposal because the country of origin principle was to apply to such 
services;  but  when  this  was  rejected  by  the  legislator  and  instead  it  was  agreed  that 
Member  States  could  keep  in  place  requirements  also  for  the  cross-border  provision  of 
services,  the  scope  of  the  notification  requirement  was  extended  to  cover  such 
requirements.  Establishment  requirements  beyond  Article  15  were  not  covered  by  the 
notification  obligation 
in  the  original  Commission  proposal  because  their  relative 
importance  and  national  regulatory  activity  on  such  requirements  was  originally 
underestimated. During the negotiations of the draft Directive it was decided not to cover 

29 Article 16 and 39(5) of the Services Directive 
30  Article  16  shall,  according  to  Article  17,  not  apply  to  (1)  services  of  general  economic  interest  which  are 
provided  in  another  Member  State,  inter  alia:  a)  postal  services  covered  by  Directive  97/67/EC,  b)  electricity 
services  covered  by  Directive  2003/54/EC,  c)  gas  services  covered  by  Directive  2003/55/EC,  d)  water 
distribution  and  supply  services  and  waste  water  services  and    e)  treatment  of  waste,  (2)  matters  covered  by 
Directive  96/71/EC  (posting  of  workers),  (3)  matters  covered  by  Directive  95/46/EC  (data  protection).  (4) 
matters  covered  by Directive  77/249/EEC (lawyers),  (5)  the  activity of judicial recovery of  debts, (6)  matters 
covered  by  Directive  2005/36/EC  (professional  qualifications),  (7)  matters  covered  by  Regulation  (EEC)  no 
1408/71(social  security  schemes),  (8)  matters  covered  by  Directive  2004/38/EC  (administrative  formalities  of 
competent  authorities  in  Member  States  with  which  beneficiaries  must  comply),  (9)  possibilities  to  require 
VISA  or  residence  permit  for  third  country  nationals,  (10)  matters  covered  by  Regulation  (EEC)  no  259/93 
(shipment of waste) and (11) copyright, neighbouring rights and matters covered by Directive 87/54/EEC  and 
Directive 96/9/EC, (12) involvement of notaries, (13) matters covered by Directive 2006/43/EC (statutory audit 
of annual accounts and consolidated accounts, (14) registration of vehicles leased in another Member State and 
(15) rules linked to private international law. 
31 According to Article 15(2) Member States shall notify the following requirements: a) quantitative or territorial 
restrictions,  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 Directive 2005/36/EC or provided for 
in other community acts, which reserve access to the service activity in question, e) ban on having more than 
one  establishment  in  the  territory  of  the  same  Member  State,  f)  requirements  fixing  a  minimum  number  of 
employees,  g)  fixed  minimum  and/or  maximum  tariffs  and  h)  an  obligation  on  the  provider  to  supply  other 
specific services jointly. 

17 

 
 
                                                 
additional  establishment  requirements  as  the  scope  of  the  notification  obligation  was 
already  being  extended  to  cover  requirements  effecting  temporary  cross-border  services 
provision. As a result, authorisation schemes, insurance requirements and multi-disciplinary 
restrictions, which are dealt with in separate Articles of the Directive, were not covered by 
the notification obligation. 

This  is  a  major  driver  for  the  ineffectiveness  of  the  existing  notification  scheme.  A  mutual 
evaluation exercise undertaken in 2010 and 2011 concluded that there were around 4400 
authorisation  schemes  and  225  multi-disciplinary  requirements  in  place  across  the  EU, 
confirming  high  regulatory  activity  on  these  issues.32  The  mutual  evaluation  process 
established that different types of horizontal authorisation schemes, i.e. schemes that apply 
to all or a large variety of services, exist in Member States. It further established that several 
layers of procedures can still apply, even though some Member States reduced the scope of 
authorisation  schemes  and/or  replaced  them  with  prior  declaration  obligations  for  some 
services.  

A  recent  Commission  assessment33  confirmed  that  a  considerable  number  of  insurance 
requirements  remain  in  place  for  the  services  provided  by  accountants,  architects, 
engineers  and  lawyers.  Although  only  a  limited  group  of  Member  States  had  such 
requirements in place for all four business services assessed, only two Member States had 
no  insurance  requirements  in  place.  The  same  Commission  assessment  also  showed  strict 
requirements in several Member States in relation to multidisciplinary activities. 

Over the past years, the Commission had to launch several enforcement actions to address 
authorisation  requirements,  multidisciplinary  restrictions  and  professional 
indemnity 
insurance  requirements  constituting  significant  barriers  preventing  the  establishment  of 
services  providers.  If  these  requirements  were  covered  by  the  notification  obligation,  the 
notification procedure could help ensure that any new or changed regulatory requirement 
introduced  by  Member  States  would  comply  with  the  principles  on  non-discrimination, 
necessity  (i.e.  justified  by  an  overriding  reason  of  public  interest)  and  proportionality  and 
thereby  be  compliant  with  the  Services  Directive.  These  requirements  currently  falling 
outside the scope of the notification obligation means its mechanism is not available for an 
important area of Member States' regulatory activity. 

In  the  public  consultation  many  respondents  highlighted  the  incoherence  in  notification 
obligations and stressed the need to enlarge the scope of the current notification obligation, 
in  particular  as  concerns  authorisation  requirements  (73  out  of  126  respondents), 
requirements  affecting  multidisciplinary  activities  (71  out  of  126  respondents)  and 

32  Communication  from  the  Commission  to  European  Parliament,  the  Council,  the  European  Economic  and 
Social Committee and the Committee of the Regions, Towards a better functioning Single Market for services – 
building  on  the  results  of  the  mutual  evaluation  process  of  the  Services  Directive,  27.1.2011,  COM(2011)  20 
final. 
33  Business  services  –  Assessment  of  Barriers  and  their  Economic  Impact,  http://ec.europa.eu/growth/single-
market/services/economic-analysis/index_en.htm 

18 

 
 
                                                 
professional indemnity insurance requirements (63 out of 126 respondents), which was also 
supported by a majority of the responding public authorities.  

2.2.5.  Driver  5  Unclear 

legal  consequences  when  the  notification 

obligation is not respected by Member States 

Under  the  existing  rules,  there  is  a  lack  of  clarity  and  potential  absence  of  legal 
consequences  of  a  failure  to  notify.  The  Services  Directive  remains  silent  as  to  what  the 
possible legal consequence could be. 

In  the  context  of  the  public  consultation  and  substantive  debates  with  public  institutions, 
most  stakeholders  requested  the  Commission  to  provide  clear  guidelines  on  the  legal 
consequences  when  the  notification  obligation  is  not  respected.  80%  of  the  public 
authorities  responding  to  the  public  consultation  supported  the  need  to  clarify  the  legal 
consequences of not respecting the notification obligation. The lack of clarity and potential 
absence  of  legal  consequences  of  the  failure  to  notify  a  new  requirement  means  not  all 
Member States comply with the notification obligations. 

Although  it  is  impossible  for  the  Commission  to  present  precise  figures  as  to  how  many 
more  notifications  it  should  have  received,  the  following  provides  an  estimate:  taking  the 
average amount of notifications by the top 11 notifying Member States, Member States not 
notifying and the Member States providing very few notifications should have per year an 
average of 13 notifications (for more detail in respect of the calculations see Annex 4). 

On several occasions the Commission received notifications by some Member States related 
to the transposition of EU legislation into national law. Given the transposition obligation for 
all  Member  States,  corresponding  notifications  should  have  been  received  by  all  Member 
States. This again confirms the uneven compliance of Member States with the notification 
obligation. 

While the SMTD on the notifications in the area of goods and information society services 
equally  does  not  contain  a  special  provision  in  terms  of  possible  legal  consequences  of  a 
measure not being notified, the Court of Justice in its ruling in case C-194/94 concluded that 
a national provision which had to be notified under Directive 98/34/EC (the predecessor of 
the SMTD) but was not shall be declared inapplicable to individuals by national Courts. This 
could also be the case when a Member State adopts a regulation in breach of the obligation 
to respect the standstill period (C443/98) foreseen in the SMTD.  

19 

 
 
 
2.2.6.  Problem tree 

2.3.  Who is affected, in what ways and to what extent? 

2.3.1.  Services providers  

Service providers established in the EU are highly affected by a notification procedure that 
does not meet its objective. In the absence of an effective notification mechanism Member 
States  may  introduce  requirements  which  are  not  compatible  with  the  Services  Directive 
and  which  can  only  be  repealed  following  an  infringement  procedure.  If,  for  example,  a 
Member  State  introduces  disproportionate  establishment  requirements  banning  a  service 
provider from an activity in that country or makes certain tariffs mandatory, those obstacles 
apply as from the day of their adoption at national level. If those requirements were notified 
at draft stage, the negative effect on the companies operating on the single market could be 
avoided through preventive ex-ante enforcement. In the absence of an efficient notification 
mechanism,  obstacles  once  created  remain  in  place  until  an  infringement  procedure  is 
successfully completed (taking 29 months on average). 

An assessment34 by the Commission shows, for example, that in the business services sector 
Member  States  with  more  restrictive  barrier  levels  see  a  lower  number  of  new  service 
providers entering their markets. As a result, competition is lower in these Member States 
and  market  dynamics  are  constrained.  Indeed,  Member  States  with  more  restrictive 
regulatory  barriers  see  a  lower  combined  share  of  companies  entering  and  exiting  the 
market (‘churn rate’). 

34  Business  services  –  Assessment  of  Barriers  and  their  Economic  Impact,  http://ec.europa.eu/growth/single-
market/services/economic-analysis/index_en.htm 

20 

 
 
 
 
                                                 
A  recent  assessment  of  the  construction  services  sector  in  the  EU,  published  by  the 
Commission 
is  considerable  room  for 
simplification  of  procedures  imposed  on  cross-border  service  providers  of  construction 
services, in terms of establishment and those offering temporary cross border services. 

in  February  201635  also  showed  that  there 

As  a  result  service  providers  face  obstacles  while  doing  business  in  other  Member  States, 
either by trying to establish in that Member State or by providing cross-border services. This 
applies  to  both,  foreign  and  domestic  services  providers,  with  a  serious  impact  in 
particularly  for  SMEs.  Complying  with  all  requirements  in  place  in  the  various  Member 
States  leads  to  a  considerable  cost  which  weighs  more  heavily  (proportionally)  on  the 
turnover of SMEs. 

More  specifically,  due  to  the  lack  of  transparency  in  the  current  system,  service  providers 
can  often  not  be  easily  made  aware  of  regulatory  measures  that  other  Member  States 
intend  to  introduce,  and  which  might  impact  them  and  their  activities.  Certainly,  foreign 
services  providers  could  participate  in  a  domestic  consultation  process.  However,  such 
processes usually take place in the national languages of the Member State concerned and 
have a focus on domestic concerns with the cross-border dimension usually neglected. 

The  current  scope  of  the  notification  obligation 
limited  to  certain  regulatory 
requirements. If all requirements affecting the freedom of establishment and the freedom 
to  provide  cross-border  services  covered  by  the  Services  Directive  were  subject  to  the 
notification obligation, this would generate an important positive impact for SMEs. 

is 

2.3.2.  Services recipients 

Services recipients are directly being given rights by the Services Directive (in respect of the 
prohibited  restrictions  under  Article 19  and  the  non-discrimination  principle  in  Article  20). 
Moreover, service recipients are also affected by the Services Directive because for example 
the prohibition of restrictions of the freedom to provide services cross-border under Article 
16 Services Directive also target restrictions related to service recipients. This leads to the 
fact  that  in  particular  in  Member  States  with  more  restrictive  environments  service 
recipients  may  not  benefit  (or  do  so  to  a  limited  extent)  from  the  EU  single  market  for 
services and thus end up paying higher prices for these services than consumers in Member 
States with lower barriers or have lower quality or choice36. The requirements in place could 
very  well  hinder  service  providers  willing  to  do  business  across-borders,  therefore 
influencing  what  is  on  offer  and  potentially  affecting  the  competition  between  service 
providers, which in turn will also have an impact on consumer's choice. 

35  Simplification  and  mutual  recognition 
http://bookshop.europa.eu/en/simplification-and-mutual-recognition-in-the-construction-sector-under-the-
services-directive-
pbET0116073/;pgid=Iq1Ekni0.1lSR0OOK4MycO9B0000kq6TNbTU;sid=1dqtLZ6BxIStJMmWiXczivykdxnR
fZlS0wk=?CatalogCategoryID=9cQKABstREYAAAEjKJEY4e5L 
36 Cf. Business services – Assessment of Barriers and their Economic Impact 

the  construction  sector  under 

the  Services  Directive, 

in 

21 

 
 
                                                 
2.3.3.  National authorities  

Based on information received from some Member States and follow-up reflections in the 
Expert Group on the Services Directive with all of them, the average time spent to comply 
with the current notification procedure is 12 working hours per notification. Taking the EU 
average of hourly earnings of civil servants with university education of €32.10, this results 
in  an  average  administrative  cost  of  €385.20  per  notification.  This  cost  varies  significantly 
between  Member  States  from  €45.60  in  Bulgaria  to  €426  per  notification  in  the 
Netherlands,  due  to  differences  in  hourly  earnings  between  Member  States37(for  detailed 
evidence overview, see Annex 4). 

Lack  of  notifications,  notifications  of  already  adopted  requirements  or 
insufficient 
information  on  notified  measures  are  shortcomings  also  impacting  national  authorities  as 
their information on and opportunity to input to regulatory requirements being introduced 
by  other  Member  States  is  limited.  Furthermore,  a  more  effective  notification  procedure 
could  prevent  lengthy  infringement  proceedings  between  the  Commission  and  Member 
States, which had in 2014 an average duration of 29.1 months. Even if the average duration 
would be 0 months, authorities would have more costs to follow an infringement procedure 
because they would have to re-launch entire national procedures for changing laws. 

At present the costs for running notifications are uneven between Member States given that 
some Member States notify while others do not.  

2.4. What is the EU dimension of the problem? 

The  ineffectiveness  of  the  existing  preventive  enforcement  mechanism  established  by  the 
introduction  of  new  unjustified  and 
present  notification  procedure  means  the 
disproportionate  regulatory  barriers  to  the  services  single  market  by  Member  States  is  at 
present  not  avoided  in  an  effective  manner.  This  results  in  new  regulatory  barriers 
hampering the integration and competitiveness of the EU single market for services. 

2.5.  How would the problem evolve, all things being equal? 

All  things  being  equal  the  problem  and  underlying  drivers  described  and  explained  above 
would  remain.  As  a  result,  there  would  be  a  continued  risk  of  Member  States  introducing 
new unjustified and disproportionate barriers that are not in compliance with the Services 
Directive.  The  Commission  would  continue  the  dialogue  with  the  Member  States with  the 
aim to improve the fulfilment of the notification obligation. It would do this by requesting 
clarifications and issue comments on the notifications. 

Furthermore,  the  Commission  would  continue  the  discussions  in  the  Expert  Group  on  the 
individual  notifications  with  a  particular  focus  on  the  proportionality  assessment  but  also 
show  statistics  on  the  notifications  per  Member  State  per  year  and  the  amount  of 

37 See Annex 4 with evidence overview for details.  

22 

 
 
                                                 
comments issued by both the Commission and the Member States and statistics in respect 
of the response performance per Member State in respect of such comments. 

It is unlikely that these discussions would lead to much change in Member States complying 
with  the  notification  obligation.  Some  Member  States  would  continue  to  protect  the 
domestic markets and lack of awareness in particular at lower levels of government would 
remain. Member States would likely continue introducing requirements that create barriers 
and  hamper  the  further  development  of  the  single  market  for  services,  resulting  in 
economic potential not being reached. There would be no incentive for Member States to 
notify,  when  notification  leads  to  an  immediate  assessment  of  the  notified  requirement, 
while where this is not notified such an assessment would only take place under a potential 
EU Pilot or infringement procedure.  

Even if enforcement action in the form of infringement procedures became in future much 
quicker compared to the current situation (an average of 29 months), this would still result 
in a period of regulatory insecurity for stakeholders due to the situation remaining unclear 
until the proceedings coming to an end and the entry into force of possible adaptations to 
the national measures at stake.      

Parallel  EU  policy  initiatives,  such  as  the  proportionality  test  would  not  alter  the  situation 
described above. 

The initiative  for a proportionality test38 aims to improve the quality of the assessment of 
the proportionality of regulatory requirements that Member States must undertake under 
the  Professional  Qualifications  Directive39.  To  this  end,  the  initiative  defines  minimum 
criteria  to  be  followed  during  the  assessment  by  Member  States  of  the  proportionality  of 
falling  under  the  Professional  Qualifications  Directive.  Where  such 
requirements 
requirements  also  fall  under  the  notification  obligation  under  the  Services  Directive,  the 
minimum  criteria  for  proportionality  assessments  to  be  established  by  the  initiative  for  a 
proportionality test would also apply to the content of the proportionality assessments that 
Member  States  must  undertake  under  the  notification  procedure  established  by  the 
Services Directive. Therefore, although the initiative for a proportionality test will not deal 
with the notification obligation under the Services Directive per se, there will be measures 
to be notified under the Services Directive, to which the initiative for a proportionality test 
will apply, contributing to more thorough proportionality assessments.  

38 Page 9 of the Communication from the Commission to the European Parliament, the Council, the European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions,  'Upgrading  the  Single  Market:  more 
opportunities for people and business' , COM(2015) 550 final, 28.10.2015,  
http://ec.europa.eu/DocsRoom/documents?locale=en&tags=single-market-strategy-2015-communication 
39 Article 59(3) of Directive 2005/36/EC 

23 

 
 
                                                 
3.  EU right to act 

3.1.  Does the EU have the right to act? 

The provisions of the Treaty (Articles 53(1), 62 and 114 TFEU) give the EU the competence 
to act with regard to the single market for services. 

EU  rules  adopted  under  Articles  53(1)  and  62  TFEU  should  have  as  the  objective  the 
coordination  of  the  provisions  laid  down  by  law,  regulation  or  administrative  action  in 
Member States concerning the taking-up and pursuit of activities as self-employed persons, 
with regard to the right of establishment and the freedom to provide services. Article 114 
TFEU  gives  the  EU  the  competence  to  adopt  EU  legislation  for  the  establishment  and  the 
functioning of the single market in general. 

The objective of the present initiative is to ensure a smoother and speedier enforcement of 
the  Services  Directive  through  an  improved  notification  procedure.  The  notification  of 
national  draft  regulatory  measures  under  this  procedure  provides  for  an  opportunity  to 
prevent the adoption of unjustified or disproportionate national measures. The notification 
mechanism thereby contributes to the overall coherence between national rules preventing 
the emergence of future obstacles resulting from their heterogeneous development. 

The  notification  procedure  provides  for  a  consultation  mechanism  that  allows  for  the 
communication  of 
information  by  the  notifying  Member  States  (draft  regulations, 
information on proportionality etc.) and the possibility for the Commission, other Member 
States and stakeholders to enter into a dialogue with the notifying Member State. 

The appropriate legal basis for the initiative are therefore Articles 53(1) 62 and 114 TFEU. 

3.2. What would be the added value of action at EU level? 

According to the principle of subsidiarity set in Article 5 TFEU, action at EU level may only be 
taken if the envisaged aims cannot be achieved sufficiently by Member States alone and can 
be better achieved at EU-level. 

The  Services  Directive  has  as  objective  to  facilitate  the  freedom  of  establishment  for 
services providers and the free movement of services in the single market. The notification 
procedure contributes to this objective, which by its very nature requires action at EU level 
as  in  the  context  of  services  single  market,  regulatory  measures  adopted  by  one  Member 
State  impact  the  single  market  as  a  whole.  They  create  obstacles  to  services  providers 
established in other Member States seeking to offer services cross-border or to establish in 
the Member State in question as well as to the services providers who want to establish in 
their country.  

24 

 
 
 
Given  the  transnational  character  of  the  single  market,  the  need  for  better  performing 
services  markets,  and  the  objective  of  the  notification  procedure,  namely  to  ensure  its 
proper functioning, an action is necessary at EU level. 

3.3. Consistency with other EU policies and with the Charter for 

fundamental rights 

The initiative to reform the notification procedure stems from the Single Market Strategy40, 
adopted on 28 October 2015, which announced several actions to further develop the single 
market for services. These actions also feature in the Commission Work Programme 2016. 

One objective of any legislative proposal to improve the notification procedure for services 
would be to improve the consistency with the existing notification procedure for goods and 
information  society  services  established  by  the  Single  Market  Transparency  Directive 
(SMTD). 

The  SMTD  covers  both  goods  and  information  society  services.  According  to  the  SMTD, 
Member  States  must  inform  the  Commission  of  any  draft  technical  regulation  prior  to  its 
adoption. Starting from the date of notification of the draft, a three-month standstill period 
–  during  which  the  notifying  Member  State  cannot  adopt  the  technical  regulation  in 
question – enables the Commission and the other Member States to examine the notified 
text and to respond appropriately. 

Where  it  emerges  that  the  notified  drafts  may  create  barriers  to  the  free  movement  of 
goods or to the free provision of information society services, the Commission and Member 
States may submit a detailed opinion to the Member State that has notified the draft. The 
detailed opinion has the effect of extending the standstill period by additional three months 
for  products  and  by  additional  one  month  for  services.  In  the  event  of  a  detailed  opinion 
being issued, the Member State concerned has to explain the action that it intends to take 
in response to the detailed opinion. 

Member  States  are  bound  to  inform  the  Commission  of  final  texts  as  soon  as  those  texts 
have been adopted and to indicate cases in which the notified draft has been abandoned, in 
order to allow the procedure under the SMTD to be closed. If the draft technical regulation 
undergoes  substantial  changes  Member  States  are  obliged  to  re-notify  the  draft  measure 
with the application of a new standstill period. 

The Court of Justice in its judgement in case C-194/94 'CIA-Security’41 ruled that a national 
provision which was not notified under the '98/34 procedure' while it should have been, can 

40  Communication  from  the  Commission  to  European  Parliament,  the  Council,  the  European  Economic  and 
Social Committee and the Committee of the Regions, Towards a better functioning Single Market for services – 
building  on  the  results  of  the  mutual  evaluation  process  of  the  Services  Directive,  27.1.2011,  COM(2011)  20 
final. 
41 Judgment of the Court of 30 April 1996, Case C-194/94 'CIA Security International SA v Signalson SA and 
Securitel SPRL'.  

25 

 
 
                                                 
be  declared  inapplicable  to  individuals  by  national  courts.  In  case  C-443/98  'Unilever'42  it 
was  decided  that  a    technical regulation,  adopted  in  breach  of  the  obligation  to  postpone 
the adoption of a notified national legislation, i.e. to respect the standstill period, can also 
be  declared  inapplicable  to  individuals  by  national  courts.  The  current  notification 
procedure in the  Services Directive explains that the  notification of a draft national law in 
accordance with the SMTD shall fulfil the obligation of the notification provided for in the 
Services Directive. 

One further objective of any legislative proposal to improve the notification procedure for 
services  would  be  to  improve  the  consistency  with  the  reporting  obligation  for  Member 
States under the Professional Qualifications Directive (PQD; Directive 2005/36). This is the 
case  notably  as  regards  the  assessment  of  the  proportionality  of  national  measures, 
mandatory both under the Services Directive and the PQD. 

The PQD establishes rules according to which a Member State makes access to or pursuit of 
a regulated profession dependent on the possession of specific professional qualifications.  

Under the PQD, Member States have to provide every two years a report to the Commission 
about the requirements which have been removed or made less stringent. Member States 
shall  also  provide  the  Commission  with  information  on  requirements  they  introduced  and 
the reasons for considering that those requirements are compatible with the PQD, within six 
months of the adoption of the measure introducing such requirements. 

In  the  Single  Market  Strategy43,  an  initiative  was  announced  to  improve  the  quality  of 
proportionality  assessments  of  regulations  governing  professional  qualifications.  Such  an 
initiative would set criteria for Member States when preparing proportionality assessments 
of draft national laws falling under the PQD. Some measures falling under the PQD may also 
fall  under  the  Services  Directive  and  its  notification  obligation.  In  such  cases,  the 
information  on  the  proportionality  assessment  to  be  provided  following  the  notification 
procedure  under  the  Services  Directive  would  have  to  meet  the  requirements  of  the 
proportionality test set out in the PQD. 

Any  services  notifications  initiative  would  promote  rights  enshrined  in  the  Charter  of 
Fundamental Rights and in particular in Article 11 on freedom of information, since a high 
degree of transparency would be allowed to the public by giving it access to the notification 
information and in Article 16 on freedom to conduct a business, since this initiative would 
contribute  to  preventing  that  unjustified  or  disproportionate  barriers  to  the  provision  of 
services would be tabled by Member States. 

42 Judgment of the Court of 26 September 2000, Case C-443/98 'Unilever Italia SpA v Central Food SpA'.  
43  Communication  from  the  Commission  to  European  Parliament,  the  Council,  the  European  Economic  and 
Social Committee and the Committee of the Regions, Towards a better functioning Single Market for services – 
building  on  the  results  of  the  mutual  evaluation  process  of  the  Services  Directive,  27.1.2011,  COM(2011)  20 
final. 

26 

 
 
                                                 
4.  Objectives 

4.1.  General policy objectives 

The  general  policy  objective  of  this  initiative  is  to  contribute  to  more  competitive  and 
integrated services markets. This is to be achieved through an improved enforcement of the 
EU  Services  Directive,  which  prevents  at  an  early  stage  the  introduction  of  unjustified 
barriers  at  Member  States'  level  that  could  hamper  the  freedom  of  establishment  of 
services providers and the freedom to provide services cross-border. 

4.2. Specific policy objectives 

There are 4 specific policy objectives to this initiative: 

1. Increase the effectiveness of the notification procedure as a whole 

2. Improve the quality and content of notifications submitted 

3. Align the notification obligation closer to the scope of the Services Directive 

4. Enhance compliance with the notification obligation 

5.  Policy options 

5.1. Discarded Options 

5.1.1.  Including services in the Single Market Transparency Directive 

Experience  and  feedback  from  Member  States  and  stakeholders  show  that  the  existing 
Single  Market  Transparency  Directive  (SMTD)  procedure  described  in  section  3.3  works 
satisfactorily.  Although  it  also  applies  to  information  society  services,  its  main  field  of 

27 

 
 
 
application is that of goods (approximately 94% of notifications received as per the SMTD in 
2015 concerned goods). 

Including  services  within  the  scope  of  the  SMTD  would  at  first  seem  an  attractive  policy 
option  to  ensure  coherence  of  procedures  and  realise  synergies  both  on  the  side  of  the 
Commission and with Member States. 

The Commission nevertheless decided to discard this policy option. The regulation of goods 
and  services  in  EU  law  differs  fundamentally.  While  80%  of  EU  goods  are  subject  to 
harmonised  EU  rules,  the  remaining  20%  are  subject  to  the  mutual  recognition  principle 
between Member States. In the services sector, harmonisation of applicable regulations at 
EU level is very limited. So is the application of the mutual recognition principle. Instead, the 
Services  Directive  establishes  a  legal  framework  with  key  principles  for  Member  States  to 
apply and implement in their national legal systems and contexts. 

As  a  consequence,  the  scope  for  and  approach  of  national  regulatory  measures  differs 
widely between goods and services. This has consequences for the demands placed on the 
respective notification procedures. Thus, in the absence of much regulatory harmonisation 
and  mutual  recognition,  the  notification  procedure  applicable  to  services  aims  to  ensure 
that  regulatory  requirements  that  Member  States  introduce  comply  with  the  principles  of 
non-discrimination,  necessity  and  proportionality  defined  in  the  Services  Directive.  The 
proportionality assessment to be undertaken by Member States is particularly important to 
judge if the regulatory requirement is in line with the Services Directive. A summary of such 
an  assessment  must  hence  be  supplied  under  the  services  notification  procedure.  It  is, 
however,  not  required  under  the  SMTD  given  a  proportionality  assessment  of  regulatory 
requirements is less relevant in the area of goods in the light of regulatory harmonisation 
and mutual recognition. 

Moreover,  the  existing  notifications  procedure  under  the  Services  Directive  includes  the 
possibility  for  the  Commission  to  adopt  formal  Decisions  in  line  with  Article  288  TFEU, 
where the Commission believes that a notified regulatory requirement is not in line with the 
Services  Directive.  This  provision  was  included  in  the  Services  Directive  to  provide  for  an 
effective  mechanism  to  avoid  the  introduction  of  unjustified  regulatory  requirements 
contradicting the Services Directive by Member States not bound by the harmonisation of 
rules  at  EU  level  and  subject  only  to  limited  mutual  recognition.  The  possibility  for  the 
Commission to adopt formal Decisions is, however, not foreseen under the SMTD. 

Lastly, political considerations also played a role, namely regulatory risks stemming from a 
re-negotiation  of  the  existing  SMTD  also  with  regards  to  its  application  to  regulatory 
requirements governing the free movement of goods in the single market (e.g. the existing 
standstill clause). 

28 

 
 
5.1.2.  Merging  the  obligation  under  the  PQD  with  the  notification 

obligation of Services Directive 

A further policy option at first considered, but then discarded was a potential merger of the 
reporting  obligation  under  the  Professional  Qualifications  Directive  (PQD)  with  the 
notification obligation of the Services Directive. Several reasons led to this decision. 

Firstly,  the  services  covered  by  the  two  Directives  differ  in  scope.  Several  services  sectors 
are  covered  by  the  PQD,  but  not  by  the  Services  Directive,  including  health  services  and 
transport services. 

Secondly,  while  related,  the  two  Directives  differ  in  their  subject  matter:  one  deals  in 
principle  with  the  regulation  of  professional  qualifications  of  individual  persons  and  their 
mobility, the other with the regulation of services markets more widely. 

Thirdly, the two procedures in the PQD on the one hand and the Services Directive on the 
other hand differ significantly. The obligation under the PQD is a reporting obligation which 
does not contain any consultation with the Commission and the other Member States; this 
is  in  contrast  with  the  notification  procedure  under  the  Services  Directive,  which  does 
provide for such a dialogue. Furthermore, the reporting obligation in the PQD is a result of 
the  amending  Directive  2013/55  and  only  entered  into  force  in  January  2016.  Experience 
with  the  application  of  this  reporting  obligation  should  be  gathered  before  it  is  amended. 
The  identified  shortcomings  of  the  notification  procedure  under  the  Services  Directive, 
however, require more immediate action. 

5.1.3.  Services sectors outside the scope of the Services Directive 

A third policy option discarded was an extension of the scope of the notification obligation 
under  the  Services  Directive  to  services  sectors  not  covered  by  that  Directive.  With  the 
objective  of  this  initiative  being  an  improved  enforcement  of  the  Services  Directive,  the 
scope  of  services  sectors  covered  by  this  initiative  should  be  in  line  with  the  scope  of 
services sectors covered by the Services Directive. 

EU legislation which covers services outside the scope of the Services Directive (e.g. financial 
services; transport) moreover feature their own mechanisms to ensure that the rules in the 
EU  legislation  are  properly  enforced,  for  example  via  specifically  assigned  supervisory 
authorities.  There  is  no  evidence  available  which  would  justify  extending  the  scope  of  the 
notification  obligation  to  sectors  outside  the  scope  of  the  Services  Directive.  At  the  same 
time, such a step would risk considerable regulatory complications and overlaps. 

5.2. Policy Option 1: Baseline scenario: No EU policy change 

The baseline scenario implies no changes to the notification procedure under the Services 
Directive.  Member  States  would  continue  to  notify  their  measures  under  the  obligation 
currently  foreseen  Member  States  and  the  Commission  would  continue  to  provide 
comments on notified measures, where appropriate, requesting the notifying Member State 

29 

 
 
to take these  into account. Where this would not be done and in case of an infringement 
with  EU  law,  the  Commission  would  continue  to  launch  enforcement  action,  starting  with 
EU Pilots. 

The  assessment  of  the  proportionality  of  notified  measures,  the  results  of  which  must  be 
stated as part of the notification of a measure, would be improved subject to the potential 
parallel  Commission  initiative  on  a  proportionality  test,  which  would  aim  to  provide 
guidance to Member States on their proportionality assessments.  

In the context of the Single Market Strategy adopted on 28 October 2015, the Commission 
would also seek to develop other policy initiatives intended to foster the integration of the 
services markets in the EU, including the European services card.  

Under  the  baseline  scenario,  the  Commission  would  also  continue  working  in  cooperation 
with Member States on national reforms, notably in the context of the European Semester, 
to improve the functioning of the services markets. 

5.3. Policy Option 2: Non-legislative initiative (guidelines) 

Under this option, the Commission would issue guidelines to Member States to improve the 
application  of  the  existing  notification  obligations  stemming  from  the  Services  Directive. 
This would be done via a non-legislative measure and fully reflect existing legal provisions. 
The guidelines would build on the Commission’s experience in handling notifications and on 
existing  guidance  given  notably  through  the  Handbook  on  the  implementation  of  the 
Services Directive published in 2007.44 The guidelines would not be binding. 

The guidelines would offer clarifications on the exact notification obligations under Articles 
15(7) and Articles 16 and 39 of the Services Directive. 

Member States would also be encouraged to notify new requirements as early as possible 
and  preferably  before  their  final  adoption  into  national  law,  for  the  Commission  and/or 
other Member States to submit comments where appropriate. 

In  addition,  the  guidance  would  encourage  Member  States  to  provide  substantive 
information on the proportionality assessment when they notify a new requirement. 

Finally, these guidelines would clarify the respective procedures that apply to notifications 
made and the differences between them as per Article 15 of the Services Directive on the 
one hand, and Articles 16 and 39 on the other hand. 

5.4. Policy Option 3: Measures to increase the effectiveness and quality of 

the notification procedure 

Option 3 would contain measures to  increase the effectiveness of the existing notification 
procedure,  which  responds  to  the  request  from  the  Competitiveness  Council  of  2  March 

44 http://ec.europa.eu/internal_market/services/docs/services-dir/guides/handbook_en.pdf 

30 

 
 
                                                 
2015  calling  upon  the  Commission  "to  increase  the  effectiveness  of  the  notification 
procedure under Directive 2006/123/EC".45 

An obligation to notify draft measures would be introduced (rather than measures already 
adopted  or  entered  into  force).  Measures  would  have  to  be  notified  during  the  stage  of 
preparation, when amendments on substance can still be made. The European Parliament in 
its May 2015 Report on the Single Market Strategy46 supported the notification of national 
acts  introducing  or  changing  requirements  covered  by  the  notification  obligation  at  draft 
stage. 

Measures  would  have  to  be  notified  at  least  three  months  prior  to  their  adoption.  This 
would allow for a three months consultation period consisting of two phases. During a first 
phase lasting two months, Member States and the Commission would be able to comment 
on  a  notified  measure.  During  a  second  phase  of  one  month,  the  notifying  Member  State 
would  react  to  comments  it  received.  The  choice  of  three  months  for  the  length  of  the 
consultation  period  is  based  on  other  notification  systems  and  in  particular  the  SMTD,  as 
well  as  the  current  timeframe  foreseen  in  the  Services  Directive.  Experience  with  the 
application of the existing services notification procedure and the SMTD shows that a three 
months  period  allows  for  a  dialogue  between  Member  States,  the  Commission  and 
stakeholders. 

Notifications  would  be  made  transparent  and  accessible  to  interested  stakeholders,  who 
would  thus  obtain  information  on  the  planned  introduction  of  measures  and  obtain  an 
opportunity  to  provide  comments  on  them.  Via  IMI,  a  public  interface  would  be  created, 
which  would  allow  stakeholders  to  get  access  to  the  notifications.  Stakeholders  would, 
during the three months consultation period referred to above, be able to issue comments 
to the Commission and the notifying Member State. The European Parliament in its above-
mentioned  Report  on  the  Single  Market  Strategy  supported  making  notifications 
transparent to stakeholders. The EU Council in its above-mentioned EU Council Conclusions 
also called for the transparency of notifications, which was also confirmed by a majority of 
public  authorities  supporting  the  transparency  of  notifications  in  their  responses  to  the 
public consultation. 

Member  States  would,  moreover,  be  required  to  provide  detailed  information  on  the 
proportionality  assessments  they  have  undertaken.  The 
information  regarding  the 
proportionality of requirements would have to clearly outline the public interest objective 
pursued  by  the  Member  State  and  explain  how  the  notified  requirement  is  suitable  for 
securing the attainment of that objective and does not go beyond what is necessary in order 
to attain that objective. It would also have to contain information on different policy options 
which  were  considered  in  order  to  attain  the  public  interest  objective.  The  importance  of 

45 Council document 6197/15 adopted on 2 March 2015 
46  A8-0171/2016 

31 

 
 
                                                 
proportionality  assessments  was  also  underlined  by  the  above-mentioned  Council 
Conclusions. 

In  addition,  the  existing  possibility  to  adopt  Decisions  on  regulatory  measures  concerning 
requirements  affecting  the  freedom  of  establishment  would  be  aligned  with  the  scope  of 
the  notification  obligation.  The  procedure  leading  up  to  the  adoption  of  a  Decision  would 
moreover  be  clarified  to  make  this  possibility  more  operational  and  establish  a  procedure 
that  provides  clarity  to  all  concerned  parties.  This  would  address  shortcomings  of  the 
existing mechanism identified in its evaluation (cf. Annex 5). 

5.5. Policy Option 4: Measure to expand the scope and improve 

coherence of the current notification system 

This option builds on option 3 and additionally expands the scope of requirements covered 
by the notification obligation to align it closer to the scope of the Services Directive. Thus, 
the  notification  obligation  would  be  expanded  to  establishment  requirements  related  to 
prior  authorisations  (as  referred  to  in  Article  9  of  the  Services  Directive);  requirements 
affecting multidisciplinary activities (as referred to in Article 25); and requirements to hold 
professional indemnity insurance (as referred to in Article 23).  

Of course, there are many other establishment requirements beyond those in Article 15 and 
authorisation schemes, multi-disciplinary restrictions and professional indemnity insurance 
requirements, begging the question why not other additional establishment requirements – 
or indeed all establishment requirements in general – should be covered by the notification 
obligation.  The  reason  is  that  in  line  with  the  proportionality  principle,  this  option  would 
extent the scope of the notification obligation only to requirements where the Commission 
has evidence that this would be required to achieve the objective of the initiative to prevent 
the  introduction  of  unjustified  regulatory  requirements  and  barriers  at  national  level  that 
could hamper the services single market. Judging by its experience with the application of 
the  Services  Directive  over  the  past  years,  the  Commission  at  the  present  stage  has  no 
indication  that  other  establishment  requirements  constitute  systemic  and  potentially 
unjustified  regulatory  barriers  to  the  establishment  of  services  providers  and  would 
therefore need to be covered by this initiative. As already explained under Driver 4, both the 
mutual evaluation process and the more recent assessment of barriers by the Commission 
confirmed  the  presence  of  different  types  of  horizontal  authorisation  schemes,  strict 
insurance requirements and strict requirements in relation to multidisciplinary activities in 
the Member States. The negative economic impact of such identified barriers is significant 
regarding intensity of competition, sector profitability and efficiency of resource allocation 
and  therefore  justifies  the  extension  of  the  scope  of  the  notification  obligation  to  these 
requirements. 

32 

 
 
5.6. Policy Option 5: Additional instruments to guarantee compliance by 

Member States 

5.6.1.  Policy  Option  5a:  Instrument  to  clarify  legal  consequences  of  non-

notification 

Option 5a would build on options 3 and 4 and include in addition the following element:  

The  legal  instrument  would  contain  an  explicit  provision  stating  that  breach  of  the 
obligations  to  notify  at  least  three  months  prior  to  their  adoption  draft  measures  falling 
under  the  scope  of  the  revised  notification  procedure  and/or  adoption  of  a  notified 
measures  within  three  months  following  the  issuing  of  an  alert  by  the  Commission  shall 
constitute a substantial procedural defect of a serious nature as regards its effects vis-à-vis 
individuals. .  

5.6.2.  Policy  Option  5b:  Instrument  to  render  inapplicable  adopted 

measures which are incompatible with the Services Directive 

Option 5b would build on options 3, 4 and 5a, and include in addition the following element. 

Under this option a provision could be included whereby a Commission Decision finding an 
individual  notified  measure  to  be  non-compliant  with  the  Services  Directive  would  make 
such  a  notified  and  already  adopted  measure  automatically  and  with  direct  effect 
inapplicable (without this necessitating a national legal measure to withdraw or amend it).  

5.7. Choice of legal instrument 

The realisation of policy options 1 and 2 does not require a new legislative instrument. 

Elements from policy options 3, 4 and 5 can be put into practice through the adoption of an 
EU legislative instrument based on Articles 53(1), 62 and 114  of the Treaty, which give the 
competence  to  the  EU  to  act  for  the  coordination  of  the  provisions  laid  down  by  law, 
regulation or administrative action in Member States concerning the taking-up and pursuit 
of activities as self-employed persons and for the adoption of EU rules for the establishment 
and the functioning of the single market in general. 

The  realisation  of  objectives  referred  to  in  Articles  53(1),  62  of  the  Treaty  requires  the 
adoption  of  a  Directive  which  is  also  one  of  the  legislative  instruments  which  may  be 
adopted for the purpose of the Article 114 of the Treaty. 

The Commission may consider in that context amending the Services Directive or the Single 
Market Transparency Directive (SMTD). 

The introduction of new elements to the Services Directive would impact several provisions 
of  that  Directive,  going  beyond  its  mere  technical  adaptation.  Re-opening  of  the  Services 
Directive  appears  to  be  disproportionate  and  the  necessary  improvements  can  be  better 
achieved through an enforcement instrument targeting precisely the identified issues. 

33 

 
 
Amending  the  SMTD  will  not  allow  for  the  improvement  of  the  notification  procedure  for 
services  since  there  is  no  possibility  for  the  Commission,  under  that  Directive,  to  adopt 
legally  binding  Decisions  requesting  the  Member  States  to  refrain  from  adopting  the 
notified  requirements.  Furthermore,  the  proportionality  principle  plays  a  more  important 
role in the single market for services, which differs from the single market for goods. Much 
of the single market for goods is covered by harmonised rules and, for the non-harmonised 
area  the  mutual  recognition  principle  is  widely  applied,  which  is  not  the  case  for  services. 
Therefore information on proportionality provided by the notifying Member State should be 
more  developed  in  the  case  of  services.  An  amended  SMTD  would  also  cover  several 
heterogeneous  requirements  in  the  field  of  goods  and  services  which  may  undermine  the 
overall clarity of the final legal text.  

Therefore, the realisation of the objectives will be better achieved through the adoption of a 
new Directive. 

6.  Analysis of impacts 

The analysis below will not assess social and environmental impacts because none of the 
specific policy objectives, nor the assessed policy options feature social or environmental 
dimensions. 

Option 1: Baseline scenario 

Impact on the specific policy objectives 

Option  1  is  unlikely  to  improve  the  effectiveness  of  the  notification  procedure.  The 
notification  procedure  will  continue  to  be  non-transparent  not  allowing  stakeholders  to 
provide comments on notified measures. The absence of an obligation to notify measures 
at  draft  stage  would  continue  to  limit  the  influence  of  the  consultation  period  meaning 
enforcement would continue to rely on ex-post enforcement action. 

The quality and content of the notifications might see an improvement if the initiative on a 
proportionality test announced in the Single Market Strategy47 will be adopted. For those 
measures which fall under the PQD and the Services Directive, Member States will have to 
provide  information  in  respect  of  their  proportionality  assessment  of  the  notified 
measures following the  requirements set out in the proportionality test. This will have a 
positive effect on the quality and content of the notified measure. 

Other  initiatives  in  the  Single  Market  Strategy,  like  the  European  services  card,  will  not 
have an effect on the specific policy objectives of this initiative. 

Under  this  option,  the  scope  of  the  notification  obligation  would  continue  to  be  limited 

47  Communication  from  the  Commission  to  European  Parliament,  the  Council,  the  European  Economic  and 
Social Committee and the Committee of the Regions, Towards a better functioning Single Market for services – 
building  on  the  results  of  the  mutual  evaluation  process  of  the  Services  Directive,  27.1.2011,  COM(2011)  20 
final. 

34 

 
 
 
                                                 
important  regulatory  requirements  concerning  the  establishment  of  services 

and 
providers would continue not to fall under the notification obligation. 

Economic Impacts 

Operating costs and conduct of business  

This option does not entail any obligation for businesses and would not entail any costs for 
them.  The  impact  on  their  activities  is  equally expected  to  be  limited  due  to  the  limited 
expected effect of this option on the policy objectives. 

Impact on the Single Market 

The  impact  of  this  policy  option  in  terms  of  reducing  unjustified  and  disproportionate 
barriers is expected to be limited. The current situation is likely to continue. 

Competitiveness of business 

The impact on the competitiveness of businesses is expected to be limited as this option 
would not lead to an effective enforcement tool preventing the introduction of unjustified 
and disproportionate regulatory barriers. 

Impacts on SMEs and microenterprises 

In  the  absence  of  any  tangible  impact  for  the  competitiveness  of  business  and  on  the 
single market for services, the impact on SMEs and microenterprises is at most limited. 

Impact on Member States Public Authorities  

Given that this option is based on the current situation, no impact is expected for public 
authorities. 

Impact on the Commission 

The impact on the Commission will remain the same as this option does not foresee any 
changes in respect of the current situation. 

Stakeholders views 

A  minority  of  the  respondents  considered  the  current  procedure  under  the  Services 
Directive  working  well.  In  terms  of  public  authorities  23%  of  respondents  expressed  this 
opinion and for the business community 15% agreed with this statement (Annex 2). 

Option 2: Non-legislative initiative (guidelines) 

Impact on the specific policy objectives 

This option would have no measurable impact on the main policy objective as it would not 

35 

 
 
 
be  possible  to  address  key  shortcomings  of  the  existing  notification  procedure  without 
legally amending it. 

The effectiveness of the existing notification procedure will not be improved following the 
adoption  of  guidelines.  The  guidelines  could  clarify  procedural  steps  and  include 
recommendations  to  Member  States  (e.g.  to  notify  draft  measures  and  to  provide 
information  on  proportionality  assessments),  however  the  guidelines  will  not  be  able  to 
change  the  design  of  the  existing  procedure,  such  as  to  extend  the  scope  of  the 
notification  obligation  to  additionally  cover  important  establishment  requirements  or  to 
align  the  possibility  to  adopt  Decisions  to  the  scope  of  the  notification  obligation. 
Furthermore, although guidelines could suggest making the current system transparent, a 
separate decision from Member States would be required to realise transparency for third 
party stakeholders. 

Previous efforts to influence behaviour of Member States in terms of compliance, via the 
publication of the Commission handbook on the implementation of the Services Directive, 
have  not  delivered  noticeable  results.  Also,  specific  discussions  of  the  notification 
procedure  with  the  responsible  national  experts 
in  the  Expert  Group  on  the 
implementation  of  the  Services  Directive  has  had  limited  effect.  Naming  and  shaming  in 
order  to  improve  compliance  has  not  led  to  any  impact.  In  the  absence  of  any 
consequences of non-notification, Member States will have no reasons to notify on a more 
systematic basis. 

The impact of this policy option in terms of Member States notifying draft measures and 
providing more information on proportionality assessments would depend very much on 
the willingness of Member States to comply with the notification procedure. But above all, 
even if notifications would take place at draft stage, Member States would still be able to 
adopt  notified  measures,  which  would  mean  that  ex-post  enforcement  action  would  be 
the only remaining possibility for the Commission to intervene. 

Economic Impacts 

Operating costs and conduct of business  

This option does not entail any obligation for businesses and would not entail any costs for 
them.  The  impact  on  their  activities  is  equally expected  to  be  limited  due  to  the  limited 
expected effect of this option on the policy objectives. 

Impact on the Single Market 

As this option is not considered to address the specific policy objectives, its impact on the 
single market in terms of reducing unjustified and disproportionate barriers is expected to 
be limited. 

Competitiveness of business 

The impact on the competitiveness of businesses is expected to be limited as this option 
would not lead to an effective enforcement tool preventing the introduction of unjustified 
and disproportionate regulatory barriers. 

36 

 
 
Impacts on SMEs and microenterprises 

In the absence of tangible impacts on the competitiveness of business and on the Single 
Market for services, there is no noticeable impact on SMEs and microenterprises. 

Impact on Member States Public Authorities  

This option does not change the existing notification obligation and thus does not impose 
cost increases on Member States' public authorities. 

Impact on the Commission 

This option would not impact the Commission in a measurable way. Improved information 
on  proportionality  assessments  as  a  result  of  the  guidance  could  make  it  easier  for  the 
Commission to analyse incoming notifications. 

Stakeholders views 

A large majority of the respondents (both public authorities and the business community) 
supported elements to be included in an EU level policy action which can only be achieved 
through  a  legislative  instrument.  80%  of  public  authorities  and  the  business  community 
saw  the  need  to  introduce  legal  consequences  where  Member  States  do  not  fulfil  the 
notification obligation. The obligation to notify drafts received support from almost 60 % 
of the public authorities and 72% of the business community (Annex 2). 

Option 3: Measures to improve the effectiveness and quality of the 
notification procedure 

Impact on the specific policy objectives  

improve  the 
This  option  will  somewhat  address  the  specific  policy  objective  to 
effectiveness of the notification procedure by i) introducing the obligation to notify draft 
measures,  ii)  granting  access  to  interested  non-institutional  stakeholders,  iii)  defining  a 
consultation period, iv) requiring Member States to provide more detailed information on 
proportionality  assessments,  and  v)  allowing  the  Commission  to  adopt  Decisions  on 
regulatory  measures  concerning  both,  requirements  affecting  the  establishment  of 
services providers and the cross-border provision of services. 

Introducing an obligation to notify draft measures and clearly defining the procedure for a 
consultation period would constitute important improvements of the existing notification 
procedure, allowing for comments to be made when these can still be taken into account 
by the notifying Member State before it adopts the notified measure. 

Granting access to interested stakeholders would make the procedure more effective by 
allowing stakeholders to share their views on a draft notified measure, which contributes 
to better law making. 

Providing  for  the  possibility  of  Commission  Decisions  also  on  regulatory  measures 

37 

 
 
 
affecting  the  cross-border  provision  of  services  would  increase  the  effectiveness  of  the 
notification  procedure  by  providing  for  a  clear  and  transparent  mechanism  for  cases 
where a notified measure is not compatible with EU law. It will also make the notification 
procedure more coherent. 

Providing information on proportionality assessments will improve the effectiveness of the 
notification  procedure  by  allowing  other  Member  States,  the  Commission  and 
stakeholders to better understand notified measures. 

The positive impact of this policy option would be limited, however, by the fact that  the 
scope  of  the  notification  obligation  would  continue  to  exclude  important  establishment 
requirements,  limiting  the  coherence  of  the  notification  procedure.  It  would  be  further 
limited  by  the  absence  of  any  impact  on  the  compliance  by  Member  States  with  the 
notification obligation. 

Economic Impacts 

Operating costs and conduct of business  

This option does not entail any obligation for businesses and would not entail any costs for 
them. Where businesses decided to comment on notified  measures this would entail an 
administrative costs in terms of resources required to do so, but providing such comments 
is voluntary (opportunity, no obligation). 

On the other hand, a more effective notification procedure would improve the application 
of  the  Services  Directive  and  lead  to  fewer  and  less  restrictive  regulatory  barriers  being 
introduced,  and  consequently  make  it  easier  for  businesses  to  offer  their  services  in  the 
single market. 

The transparency of notifications would provide business with more upfront information 
about  national  measures  which  Member  States  plan  to  introduce.  A  large  part  of  the 
business community (almost 80%) indicated in their responses to the public consultation 
that increased transparency is very important for them. 

Impact on the Single Market 

This  option  would  positively  impact  on  the  Single  Market  because  it  would  make  the 
notification procedure more effective in preventing the introduction of unjustified barriers 
to the services single market. 

The Single Market Transparency Directive (SMTD) includes several of the elements which 
this  option  would  introduce  and  its  performance  in  preventing  barriers  to  the  single 
market can therefore serve as a proxy. As mentioned previously, it achieved an effective 
prevention  indicator  of  9.7%  in  2010  and  11.7%  in  2011.  This  indicator  measures  the 
ability of the SMTD-system to prevent barriers to intra-EU goods trade. The analysis shows 
that  a  number  of  measures  were  indeed  prevented  from  being  adopted,  which  would 
have  been  harmful  to  the  proper  functioning  of  the  Single  Market  for  goods  and 
Information Society Services. 

Competitiveness of business 

38 

 
 
54 (out of 79) of the respondents of the business community to the public consultation are 
of the opinion that a reform of the notification procedure would lead to better functioning 
of the services markets overall. In contrast to option 2, the various elements of this option 
improving 
introduction  of  unjustified  measures 
would  prevent 
competitiveness  of  business  over  the  coming  years.  Raising  awareness  of  the  regulatory 
activities within the respective services sectors of Member States would also contribute to 
improve competitiveness. 

thereby 

the 

Impacts on SMEs and microenterprises 

Preventing the introduction of barriers and increasing transparency would also positively 
impact on SMEs and microenterprises and reduce their compliance costs. 

Due  to  transparency,  more  information  is  available  in  terms  of  the  requirements 
applicable  in  the  notifying  Member  States  and  SMEs  and  microenterprises  would  also 
benefit  from  the  improved  competitiveness  as  referred  to  above.  The  option  does  not 
place any obligation on SMEs or microenterprises. 

Impact on Member States Public Authorities  

This  option  does  not  introduce  any  new  obligations  for  Member  States'  authorities.  It  is 
nevertheless  expected  to  lead  to  a  limited  increase  in  administrative  costs  for  Member 
States. 

This option introduces an obligation to notify measures at draft stage. This would result in 
additional  administrative  costs  where  draft  measures  have  to  be  re-notified  in  case 
substantial changes have been made to the notified draft act. However, the administrative 
costs associated to this are expected to be limited. The notification obligation under SMTD 
also  places  upon  Member  State  authorities  the  obligation  to  notify  again  in  case  of 
substantial changes. But in only approximately 10 of 700 measures notified per year was a 
new  notification  necessary.  Based  on  information  received  from  Member  States,  the 
average time spent to comply with the notification procedure is 12 hours per notification. 
This leads to administrative costs of €385.20 per notification assuming the EU average of 
hourly earnings for civil servants holding a university degree of €32.10. The administrative 
costs of re-notifications would therefore be limited. 

The public consultation did not show a clear view by public authorities directly concerned 
on whether the obligation to notify draft measures and subjecting them to a consultation 
period  would  result  in  an  increase  of  their  administrative  burden  /  cost.  Almost  40%  of 
responding public authorities thought it would lead to a cost increase, while almost 50% 
thought this would not be the case. 

Transparency of the notification system could lead to stakeholders detecting cases of non-
notification,  upping  the  pressure  on  Member  States  to  notify.  This  could  lead  to  an 
increase  in  notifications  and  a  corresponding  increase  in  administrative  burden  for 
Member States currently not meeting their notification obligation. The average number of 
notifications by  the  top  10 notifying Member States is 13  notifications  per year, with an 
average  administrative  cost  associated  to  the  sum  of  these  13  notifications  of  €5007.60 
per  Member  State.  Member  States  currently  notifying  fewer  than  13  measures  per  year 
would  thus  see  an  increase  in  administrative  cost  to  this  average  (see  Annex  4  for  the 

39 

 
 
calculations). 

Furthermore,  transparency  will  most  likely  result  in  comments  from  stakeholders,  which 
Member States may need to respond to, somewhat further increasing their administrative 
cost. As a proxy, Member States have indicated that they spend on average 10 hours to 
reply  to  comments  from  the  Commission  (for  more  details  in  respect  of  overview  of 
Member States' feedback is in Annex 4). 

Although the obligation to carry out a proportionality assessment of new requirements in 
the field of services already exists under the current provisions of the Services Directive, 
the  new  notification  procedure  will  require  the  Member  State  to  communicate  such  an 
assessment in a more systematic and structured way. This might result in a slight increase 
of time spent per notification by Member States. 

A positive effect  in terms of administrative costs could stem from the fact that Member 
States are likely to be faced with less EU-Pilot requests or infringement proceedings as a 
result  of  an  improved  notification  procedure  contributing  to  the  compliance  of  new 
national measures with the Services Directive. 

Impact on the Commission 

On average, the assessment of a notification by a Commission staff member will take 2-3 
hours. In case comments or questions addressed to the Member State concerned are to 
be prepared, it is estimated that this will lead to an additional 5 hours of work. 

This  option  will  impact  the  Commission  in  that  it  will  lead  to  additional  work  stemming 
from  the  comments  received  from  stakeholders  who  will  be  granted  access  to  the 
notifications  to  be  considered.  Another  element  could  be  the  possible  increase  of 
notifications from those  Member States currently  not completely fulfilling the obligation 
under the Services Directive. Further to this increase in workload, there is likely to be an 
impact on the translation costs. Currently a notification from a Member State is translated 
into English. The current translation cost is on average €26 per page. Notifications are on 
average  between  2  and  3  pages  long.  This  leads  to  an  average  translation  cost  per 
notification of €65. 

Enhancing  transparency  of  and  more  detailed  information  about  the  proportionality  of 
notified  regulations  would  make  the  assessment  of  notified  measures  easier  and  more 
concrete to assess a notification. It will be also easier for the Commission to compare the 
proportionality  assessments  from  different  Member  States  and  to  elaborate  a  common 
approach in similar situations. 

On  the  other  hand,  the  ability  for  the  Commission  to  adopt  Decisions  also  in  respect  of 
measures  affecting  temporary  cross-border  provision  of  services  could  have  a  positive 
impact as it could lead to a reduction in resource-intensive enforcement action.   

Stakeholders views 

The results of the public consultation shows a wide support (69% of public authorities and 
60%  of  the  business  community)  for  improvements  of  the  current  system  through  EU 
action and more specifically for the introduction of an obligation to notify draft legislation 
increased 
(more  than  half  of  the  public  authorities  handling  notifications),  for 

40 

 
 
transparency  (supported  by  80%  of  the  business  community  and  more  than  60%  of  the 
public  authorities)  and  for  the  introduction  of  a  clear  timeframe  to  ensure  that  all 
stakeholders  can  react  to  a  notified  measure  (support  from  65%  of  public  authorities). 
Furthermore,  in  its  Conclusions  on  Single  Market  Policy,  the  Council  of  the  European 
Union  called  upon  the  Commission  and  Member  States  to  make  notifications  public  and 
transparent for all the stakeholders as is the case for goods. 

Option 4: Measure to expand the scope and improve coherence of the 
current notification system 

Impact on the specific policy objectives  

This option, building upon option 3, would in addition address the specific policy objective 
of aligning the notification obligation closer to the scope of the Services Directive. It would 
improve  the  efficiency  and  coherence  of  the  notification  procedure  beyond  the 
improvements under option 3, by covering key regulatory requirements falling under the 
Services  Directive  but  not  under  the  present  notification  procedure  (notably  to  cover 
establishment  requirements  related  to  prior  authorisations,  requirements  affecting 
multidisciplinary  activities,  and  requirements  to  hold  professional  indemnity  insurance). 
On the other hand, this option would not improve the compliance of Member States with 
the notification obligation. 

Economic Impacts 

Operating costs and conduct of business  

This option does not entail any obligation for businesses and would not entail any costs for 
them. 

The extension of the scope of the notification procedure would lead to a reduction in the 
number of unjustified regulatory barriers being introduced by Member States in violation 
of the Services Directive, thereby further reducing regulatory barriers for businesses. 

With  a  larger  range  of  measures  to  be  notified  by  the  Member  States,  costs  borne  by 
businesses  to  find  out  the  applicable  rules  in  a  particular  Member  State  will  further  be 
reduced. 

Impact on the Single Market 

This  option  would  positively  impact  the  Single  Market  by  extending  the  scope  of  the 
notification  obligation  and  applying  its  procedure  to  additional  types  of  important 
regulatory requirements affecting services providers in the single market. 

Competitiveness of business 

A better functioning Single Market due to barriers prevented from being introduced has a 
positive effect on the competitiveness of business. This effect will be stronger than under 
option 3 as this option will cover a wider range of requirements potentially impeding the 
proper functioning of the internal market. 

41 

 
 
Impacts on SMEs and microenterprises 

Expanding the scope of the notification procedure to more  requirements of the Services 
Directive, will lead to the prevention of more potential barriers. This will positively impact 
SMEs and microenterprises. Compliance costs for SME's will be further reduced. 

Impact on Member States Public Authorities  

The  extended  scope  of  the  notification  obligation  will  result  in  a  higher  number  of 
notifications thereby increasing the administrative costs for public authorities. According 
to  the  public  consultation,  extending  the  scope  of  the  notification  obligation  to  align  it 
with the scope of the Services Directive will have a cost impact according to 54% of public 
authorities' respondents while 15% of the responding public authorities do not expect an 
impact. 

Based  on  the  mutual  evaluation  exercise  over  the  years  2010-2011,  around  4400 
authorisation schemes and 225 multi-disciplinary requirements were detected in Member 
States.  Although  the  obligation  to  notify  only  applies  when  changes  are  made  or  new 
requirements  are  introduced,  which  depends  very  much  on  developments  within  the 
respective  Member  State,  it  is  likely  that  the  number  of  notifications  to  be  made  will 
increase. As previously stated, the average cost of an individual notification for a national 
administration in the EU amounts to €385.20, with important variations between Member 
States. 

The increase in notifications would, however, also lead to Member States being subject to 
less legal enforcement action from the Commission, reducing resources required for this. 

Impact on the Commission 

In  addition  to  the  effects  of  option  3,  this  option  will  lead  to  additional  administrative 
costs  for  the  Commission.  This  will  be  the  consequence  of  an  increased  number  of 
notifications  of  national  regulatory  measures.  In  addition,  the  translation  costs  will 
increase. 

However,  the  increase  in  the  administrative  cost  for  the  Commission  would  be  partly 
compensated by an expected decrease in enforcement action against unjustified national 
measures already adopted at national level but in violation of the Services Directive. 

Stakeholders views 

Concerning the scope of the notification obligation, most respondents stressed the need 
to expand it to other types of services and requirements in order to improve consistency 
and effectiveness of EU action. 42% of public authorities  supported  extending the  scope 
also covering authorisations, 50% said the same in terms of multidisciplinary activities and 
53%  are  in  favour  of  also  covering  professional  liability  insurance  requirements  with  the 
notification obligation. 

42 

 
 
Option 5: Additional instruments to guarantee compliance by Member States 
Impact on the specific policy objectives 

In  addition  to  the  impacts  realised under  option  3  and  4,  option  5  (5a  and  5b)  would  in 
particular  pursue  the  specific  policy  objective  to  enhance  compliance  of  Member  States 
with their notification obligation. This option would, in the view of the Commission, result 
in  legal  consequences  of  non-notification  and  non-compliance  with  the  notification 
procedure, thereby further increasing the effectiveness of the notification procedure. 

Respondents  to  the  public  consultation  considered  the  improvement  and  clarification  of 
the  legal  consequences  of  non-notification  by  a  Member  State  as  one  of  the  most 
important factors that an EU action should ensure: almost 80% of respondents supported 
this.  Interestingly,  this  support  is  shared  amongst  all  respondents,  including  80%  of  the 
public authorities and 78% of the business community.  

Option 5a would insert a provision which will state that failure to fulfil certain obligations 
of  the  notification  procedure  constitutes  a  substantial  procedural  defect  of  a  serious 
nature as regards its effects vis-à-vis individuals. 

Option  5b  would  have  an  even  larger  impact  because  under  this  option  a  Commission 
Decision  declaring  a  national  measure  non-compliant  with  the  Services  Directive  would 
make such a notified measure automatically and with direct effect inapplicable. This would 
apply, for example, where a Member State would disregard a Commission Decision. This 
option would thus offer watertight solutions to ensure utmost compliance by a Member 
State and limit its room for manoeuvre.  

Economic Impacts 

Operating costs and conduct of business  

Option 5 (5a and 5b) does again not entail any obligation for business. Therefore it will not 
have an impact on their operating costs. 

Both sub-options would benefit business by reducing the barriers they face as a result of a 
more  effective  notification  procedure  preventing  the  introduction  of  unjustified  and 
disproportionate barriers. 

Impact on the Single Market 

Under  option  5,  preventive  controls  of  new  national  restrictions  will  be  more  effective 
with a more immediate effect on the functioning of the Single Market. 

The  elimination  of  regulatory  barriers  would  be  more  rigorous  through  the  use  of  the 
Decision  powers  declaring  the  national  non-compliant  regulations  inapplicable  (Option 
5b);  Member  States  would  have  no  possibility  of  ignoring  Decisions  adopted  by  the 
Commission. 

Competitiveness of business 

A  better  functioning  Single  Market  due  to  the  prevention  of  unjustified  barriers  is 

43 

 
 
expected  to  positively  affect  the  competitiveness  of  businesses.  Under  option  5  (5a  and 
5b),  even  more  unjustified  barriers  can  potentially  be  prevented:  potential  legal 
consequences of failure to meet certain notification obligations would increase incentives 
to notify and reduce the number measures that should have been notified but were not. 

Impacts on SMEs and microenterprises 

An  improved  compliance  with  the  notification  obligation  will  reduce  the  number  of 
unjustified regulatory barriers, which will positively impact SMEs and microenterprises. It 
will  in  particular  increase  trust  of  SMEs  in  the  functioning  of  Single  market  rules  and 
increase confidence that notification obligations matter in daily reality.  

Impact on Member States Public Authorities  

This  option  will  have  a  similar  impact  on  the  public  authorities  in  the  Member  States  as 
option 4. Additional costs would occur where Member States currently do not comply with 
the  notification  obligation  established  under  the  Services  Directive,  but  would  do  so  in 
future to avoid the inapplicability of non-notified measures. 

The  average  number  of  annual  notifications  by  the  top  10  notifying  Member  States 
standing at 13 (with an average administrative cost of €5007.60), Member States currently 
notifying fewer than 13 measures per year would see an increase in administrative cost to 
this average. 

There  might  also  again  be  a  decrease  of  the  costs  on  public  administrations  linked  to  a 
possible  reduction  in  legal  enforcement  cases  resulting  from  a  better  functioning 
notification procedure. 

With  Option  5b,  national  public  authorities  are  however  exposed  to  scenarios  that  they 
would actually not comply with Commission decisions (or challenge them before the Court 
of Justice). It risks being too intrusive for national legislative processes.  

Impact on the Commission 

The impact on the Commission of option 5 (5a and 5b) would be similar to the impact of 
option  4.  There  may  be  some  additional  administrative  costs  for  the  Commission  as  a 
result of a higher number of notifications received. With an average of 13 notifications per 
Member  State  per  year  this  means  around  420  notifications  per  year  (compared  to  a 
current average of 250). In addition, translation cost will rise to €11000 on a yearly basis 
(increase of 170 notifications times 2.5 pages times €26). 

A  positive  effect  will  stem  from  less  workload  due  to  less  enforcement  action  being 
necessary.  

Stakeholder views 

According  to  the  public  consultation,  the  improvement  and  clarification  of  the  legal 
consequences of non-notification by a Member State (Option 5a) was considered one of 
the most important features that an EU level policy action could include, with the support 
of almost 80% of the respondents, including 80% of the public authorities and 78% of the 

44 

 
 
business community.  

In addition, respondents supported widely the idea to provide, in a forthcoming EU wide 
initiative,  clarifications  on  when  and  how  stronger  measures  can  be  taken  by  the 
Commission  against  disproportionate  requirements,  going  in  the  sense  of  Option  5b. 
Three quarters of them answered favourably, whereas only 10% showed disagreement.  

7.  Comparison of options 

7.1.  Comparison in terms of effectiveness, efficiency and coherence 

Option 1 The evaluation of the current notification procedure shows that the procedure is 
not effective  and efficient at present. Under option 1, key factors which contribute to the 
present ineffectiveness would remain in place. Nor would option 1 improve the coherence 
of  the  procedure.  The  'baseline  scenario'  will  only  see  a  minimal  change  in  the  current 
situation if the proportionality test introduced through a parallel initiative is applied as this 
should  improve  some  of  the  proportionality  assessments  that  Member  States  need  to 
inform on as part of this notification procedure. 

Option  2  As  has  been  assessed  above,  there  would  be  no  measurable  impact  of  a  non-
legislative  initiative  (guidelines)  on  the  specific  policy  objectives  of  this  initiative. Option  2 
would  not  noticeably  improve  the  compliance  by  Member  States  with  the  notification 
obligation,  nor  would  it  improve  the  effectiveness  or  coherence  of  the  notification 
procedure.  Although  guidelines  could  improve  the  quality  and  content  of  notifications 
somewhat  (depending  on  the  degree  to  which  Member  States  would  follow  them),  no 
noticeable impact is expected of this option in terms of its overall efficiency. 

Option 3 would have some positive impact on the efficiency of the notification procedure. 
The quality and content of the notifications would improve substantially, because it would 
include  an  obligation  to  notify  acts  at  draft  stage,  make  the  system  transparent  for 
stakeholders,  lead  to  improved  information  Member  States  would  have  to  submit  on  the 
proportionality  of  new  regulatory  measures,  and  improve  the  clarity  of  the  applicable 
procedure. The coherence of the procedure would also improve, but would remain limited. 
Efficiency  improvements  would  be  limited,  however,  by  no  measurable  improvement  of 
compliance  with  the  notification  obligation  and  the  fact  that  important  regulatory 
establishment requirements would remain outside the scope of the notification obligation. 
This  option  would  lead  to  a  small  increase  of  administrative  burden  for  national 
administrations and the Commission (not for businesses) due to possible re-notifications of 
previously  notified  draft  acts  and  the  submission  of  more  detailed  information  on  the 
notified measure. 

Option  4  would  in  addition  to  the  effects  established  by  option  3  (which  it  encompasses) 
significantly improve the efficiency and coherence of the notification procedure by including 
some important and widespread regulatory requirements covered by the Services Directive 
but currently not covered by the scope of the notification obligation. This option would, on 
the  other  hand,  increase  the  administrative  costs  for  Member  States  and  the  Commission 
due to an envisaged increase in the number of measures to be notified. This cost increase 
should, however, be partially compensated by a resulting expected reduction in the need for 
ex-post enforcement action (EU pilots; infringement cases). Given the considerable increase 

45 

 
 
 
in  the  effectiveness  and  coherence  stemming  from  the  inclusion  within  the  scope  of  the 
notification  procedure  of  three 
important  and  widespread  types  of  establishment 
requirements,  this  option  would  improve  the  efficiency  of  the  notification  procedure 
beyond the improvements under option 3. 

Option  5  would  further  improve  the  effectiveness  of  this  policy  initiative,  beyond  the 
improvements of options 3 and 4, which it encompasses. The clarification of what would be 
the  consequences  of  not  respecting  certain  obligations  under  the  revised  notification 
procedure  would  positively  impact  compliance  by  Member  States  with  the  notification 
obligation,  thus  subjecting  more  national  measures  to  the  notification  procedure,  thereby 
contributing to its policy objectives. 

Table: Comparison of Options 

"0" no impact, + limited positive impact, ++ some positive impact, +++ substantial positive 
impact, - limited negative impact, -- some negative impact, --- substantial negative impact 

Impact on public 
authorities 

Effectiveness 

Efficiency 
(costs/ benefits) 

0 

0 

0 

Option 1 No 
action 
(baseline) 
Option 2 Non-
legislative 
guidelines 

(0) No changes in terms 
of notification obligation 
for public authorities 
and thus no cost 
increase for them 

Option 3 
Measures to 
improve the 
effectiveness 
and quality of 
the notification 
procedure 

(-) Obligation to notify 
acts at draft stage will in 
some cases necessitate 
re-notifications. 
Transparency may 
necessitate engagement 
with stakeholders. 

Option 4 
Expand the 
scope to 

(--) Some increase of 
administrative costs due 
to larger scope of 

(+) Clarification could improve 
quality and content depending on 
degree to which Member States 
apply guidelines to a limited extent. 
(0) No coherence as notification 
obligation does not cover important 
requirements within the scope of the 
Services Directive and Decision 
remains limited. 
(0) Compliance not improved 
(+++) Quality and content 
substantially improved via 
proportionality elements, 
transparency for stakeholders and 
obligation to notify measures at draft 
stage. 
(+) Coherence improved by Decision 
possible for all notified 
requirements. However, notification 
obligation for establishment 
requirements remains limited. 
(0) No measurable impact on 
compliance. 
(+++) Quality and content 
substantially improved via 
proportionality elements, 

46 

(0) No measurable 
impact in terms of 
efficiency 

(+) Efficiency improved 
due to substantial 
increase in quality and 
content of notifications 
and limited 
improvement in 
coherence of the 
notification procedure, 
with only a limited 
increase of costs for 
public authorities. 

(++) Efficiency improved 
due to substantial 
increase in quality and 

 
 
 
 
improve 
coherence 

regulatory measures to 
be notified, obligation to 
notify acts at draft stage 
and transparency for 
stakeholders. 

Option 5 
Ensure 
compliance 
with the 
notification 
obligation 

(a) (--) Some increase of 
administrative costs due 
to larger scope of 
regulatory measures to 
be notified, obligation to 
notify acts at draft stage 
and transparency for 
stakeholders. 

(b) (--) Some increase of 
administrative costs due 
to larger scope of 
regulatory measures to 
be notified, obligation to 
notify acts at draft stage 
and transparency for 
stakeholders. 

transparency for stakeholders and 
obligation to notify measures at draft 
stage. 
(+++) Coherence of the notification 
obligation substantially improved by 
additionally covering key regulatory 
establishment requirements and 
Decision possible for all 
requirements. 
(0) No measurable impact on 
compliance. 
(+++) Quality and content 
substantially improved via 
proportionality elements, 
transparency for stakeholders and 
obligation to notify measures at draft 
stage. 
(+++) Coherence of the notification 
obligation substantially improved by 
additionally covering key regulatory 
establishment requirements and 
Decision possible for all 
requirements. 
(+++) Substantial improvement of 
compliance from legal consequences 
of non-notification. 
(+++) Quality and content 
substantially improved via 
proportionality elements, 
transparency for stakeholders and 
obligation to notify measures at draft 
stage. 
(+++) Coherence of the notification 
obligation substantially improved by 
additionally covering key regulatory 
establishment requirements and 
Decision possible for all 
requirements. 
(+++) Substantial improvement of 
compliance from legal consequences 
of non-notification. 

content of notifications 
and substantial increase 
in coherence, with only 
some increase of 
administrative costs for 
public authorities. 

(+++) Efficiency 
improved substantially 
due to substantial 
increase in quality and 
content of notifications, 
substantial increase in 
coherence and 
substantial improvement 
in compliance, with only 
some increase of 
administrative costs for 
public authorities. 

(+++) Efficiency 
improved substantially 
due to substantial 
increase in quality and 
content of notifications, 
substantial increase in 
coherence and 
substantial improvement 
in compliance, with only 
some increase of 
administrative costs for 
public authorities.  

7.2. Preferred option / Justification for no preferred option 

The option which contributes most to the achievement of the policy objectives and has the 
most positive overall impact is option 5a. 

Option 5 would address the shortcomings of the existing procedure identified in the ex-post 
evaluation and by stakeholders: the lack of compliance with the notification obligation due 

47 

 
 
to the absence of any legal consequences, the fact that most notified measures are already 
adopted,  the  scope  of  the  current  notification  obligation  not  covering  key  requirements 
covered  by  the  Services  Directive,  the  incoherent  application  of  Commission  Decisions, 
external stakeholders not being able to access and provide comments on notified measures 
due  to  a  non-transparent  system,  and  the  absence  of  substantive  information  on  the 
proportionality of notified measures. 

Option 5 addresses the identified problems effectively; by obliging Member States to notify 
draft  measures,  making  the  notifications  accessible  to  external  stakeholders  the  option 
creates the possibility for Member States, the Commission and stakeholders to intervene in 
a  proactive  manner  prior  to  a  national  requirement  being  adopted;  improving  the 
information  that  would  be  submitted  together  with  a  notification,  notably  on  the 
proportionality  of  the  notified  measure  will  allow  other  Member  States,  the  Commission 
and  stakeholders  to  better  assess  whether  a  requirement  is  compatible  with  the  Services 
Directive. It furthermore introduces a three month consultation period which provides the 
Commission,  Member  States  and  stakeholders  with  an  appropriate  timeframe  to  consult 
and exchange views and comments on notified measures. It also improves the efficiency and 
coherence of the  notification obligation by extending its scope to important requirements 
falling under the Services Directive but not currently covered by the notification obligation, 
aligning  therefore  the  scope  of  the  notification  obligation  more  closely  with  that  of  the 
Services  Directive.  Efficiency  and  coherence  are  further  improved  by  clarifying  in  which 
cases  and  under  which  conditions  the  Commission  can  use  its  existing  Decision  powers. 
Specifying  the  consequences  of  not  respecting  certain  obligations  under  the  notification 
procedure would further increase the effectiveness of the notification obligation. 

While  the  impact  in  terms  of  costs,  effectiveness  and  efficiency  of  options  5a  and  5b  are 
similar,  the  difference  between  options  5a  and  5b  lies  in  the  consequence  of  a  possible 
Decision  adopted  by  the  Commission.  Option  5b  in  addition  to  the  element  of  option  5a, 
entails the element of 'a Decision which would 'declare' a national measure to be null and 
void' if adopted. This is in general to be considered not fully respecting the proportionality 
and  subsidiarity  principles  given  its  intrusiveness  in  national  legislative  responsibilities. 
Option 5a, on the other hand, is considered proportionate to reaching the policy objective 
of  this  initiative,  because  the  Commissions'  Decision  is  an  element  of  ex-ante  control, 
preventing the adoption of draft regulatory measures and it only entails the element given 
'effect'  to  non-compliance  with  the  notification  obligation  and  procedure  vis-à-vis 
individuals. 

7.3. Subsidiarity and proportionality of the preferred option 

The subsidiarity principle set in Article 5 TEU requires the assessment of the necessity and 
the added value of the EU action. On the base of the present impact assessment, it appears 
that EU intervention would be the only way to establish a common notification mechanism 
for the whole EU single market for services. 

48 

 
 
The  purpose  of  the  notification  mechanism  is  a  better  enforcement  of  provisions  of  the 
Services  Directive,  which  aims  specifically  to  eliminate  or  reduce  the  obstacles  to  the 
freedom of establishment and the provision of services in cross border context. The overall 
objective is to ensure a smooth functioning of the EU single market for services which is not 
limited  to  the  territory  of  one  Member  State  but  covers  the  whole  territory  of  the  EU. 
Therefore,  given  the  specificity  and  the  transnational  nature  of  the  EU  single  market,  an 
efficient  and  coherent  preventive  control  of  national  regulatory  measures  in  the  field  of 
services, including the management of an appropriate IT tool for that purpose, can only be 
achieved  at  the  level  of  the  EU.  The  transparency  of  notifications  and  notified  draft  and 
adopted acts to stakeholders will be ensured through their publication at one place by the 
Commission. 

The  obligation  for  Member  States  to  notify  draft  measures  at  least  three  months  prior  to 
their adoption will make it possible to address unjustified measures through a consultation 
procedure when changes to the legislative act are still possible – which is considerably more 
efficient than having to change already adopted measures that are not compliant with the 
Services Directive. This will contribute to the application of the subsidiarity principle in the 
sense that the notifying Member States will be able to make improvements to the national 
regulations  they  have  notified  before  their  adoption,  by  appropriate  means  chosen  at  the 
Member States level. 

The preferred option does not go beyond what is necessary to solve the identified problems 
and is proportionate to achieve its objectives: it entails only a limited increase in terms of 
administrative burden for public authorities of the Member States and the Commission, due 
to  an  increase  in  scope  of  the  notification  obligation,  the  potential  need  to  re-notify 
previously notified draft measures and better compliance with notification obligation due to 
an increased transparency. 

The  preferred  option  would  be  the  adoption  of  a  legally  binding  legal  instrument,  rather 
than non-binding guidelines (option 2). Taking into account the current shortcomings of the 
notification mechanism and several attempts by the Commission to improve the functioning 
of the system by no-binding tools, it appears necessary to adopt a legally binding instrument 
in order to ensure an appropriate implementation of the notification mechanism.   

8.  Monitoring and evaluation 

The Commission will ensure that the action selected in the course of this IA contribute to 
the achievement of the policy objectives defined in Section 4. The monitoring process could 
consist of two phases: 

1) 
The first phase would concentrate on the short-term, starting right after the date of 
transposition.  It  would  focus  on  how  Member  States  meet  the  revised  notification 
obligation. The Commission would assess the incoming notifications in IMI in the first year 
to  determine  whether  Member  States  fulfil  their  notification  obligation.  The  Commission 

49 

 
 
would in this respect first assess how those Member States with no or a very low number of 
notifications perform in comparison with the baseline scenario of 13 notifications per year. 
It would further examine the developments in terms of amount of notifications per Member 
States. The Commission will use the IMI database in this respect to gather the information. 

2) 
The  second  phase  would  be  mid-to-long-term  and  would  focus  on  direct effects of 
the rules contained in the legislative proposal. The table below presents the main indicators 
that  would  be  used  to  monitor  progress  towards  meeting  the  objectives  pursued  by  this 
initiative, as well as the possible sources of information. The information-gathering should 
start 2 years after the start of application of the legislative proposal. 

The  monitoring  process  in  terms  of  the  fulfilment  of  the  specific  policy  objectives  is 
presented in the below table.  

Specific 
objectives 
Improve the 
effectiveness 
of the 
notification 
procedure 

Operational 
objectives 
Prevent the 
adoption of 
national 
regulatory 
measures that 
are not in line 
with the Services 
Directive 

Improve the 
content of the 
notifications 
submitted by 
Member 
States  

Improve 
information on 
the 
proportionality 
of notified 
measures 

Indicator 

Source of data  

Baseline 

Reduction in EU 
pilots on newly 
introduced 
regulatory 
measures 

 Effective 
prevention 
indicator (EDI) 
adapted to the 
specificities of EU 
services 
regulation and 
the services 
notification 
procedure48 

% of notifications 
accompanied by 
reasonable 
information on 
proportionality 
assessments 
submitted by the 

IMI 

n/a 

Comments from 
Commission, 
Member States 
and stakeholders 

50% 

Box on 
proportionality 
assessment in 
IMI. 

Discussions in 
the Expert Group 

48 The ratio of the sum of the comments and Decisions of one year, divided by the total number of notifications 
which  is  then  filtered  to  eliminate  double  counting  due  to  the  fact  more  than  one  Member  State  can  have  a 
comments  on  the  same  notified  draft  law  and/or  that  a  Member  State  and  the  Commission  may  file 
comments/Decision on the same draft law. 

50 

 
 
 
 
 
 
 
 
 
                                                 
Member States 

Number of 
notifications 
concerning 
establishment 
requirements. 

Amount of 
Decisions 
adopted by the 
Commission in 
respect of 
notified 
measures. 

Increase in 
amount of 
notifications 

Improve the 
internal 
coherence of 
the 
notification 
procedure 

Expand the 
scope of the 
notification 
obligation to 
establishment 
requirements 

Improve 
consistency of 
Decision powers 

Increase the 
compliance 
with the 
notification 
obligations 

Ensure that all 
relevant 
legislation is 
notified to the 
Commission 

on the 
implementation 
of the Services 
Directive. 

IMI 

n/a 

n/a 

EUR-lex   

IMI 

5 Member 
States have 
never notified 
any measure 
and 7 Member 
States have a 
very low level 
of 
notifications 

An  application  report  could  be  issued  3  years  after  the  start  of  application  of  the  revised 
notification procedure and an evaluation could take place after 5 years. 

9.  Annexes 

9.1. Annex 1: Procedural information 

9.1.1.  Identification 

Lead DG: DG Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) 

Agenda planning/Work programme references: The Agenda Planning Reference is 
2016/GROW/029. The initiative to improve the notification procedure for services is a part of 
the Single Market Strategy, adopted in October 2015.  

51 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
9.1.2.  Organisation and timing 

An Inter-Service Steering Group was set up in 2016. In total, four meetings were organised: 
on 14 January 2016, on 23 February 2016, on 25 April 2016 and on 18 May 2016. The 
following Directorate-Generals and services were consulted: CNECT, COMP, GROW, 
MOVE, SJ, SG, JUST, EMPL, EAC, ECFIN, FISMA, SANTE, TRADE and ENER. The 
feedback received from these Directorate-Generals and services has been taken into account. 

The ISSG approved the Inception Impact Assessment and the public consultation during its 
meeting of 14 January 2016. 

The ISSG of 18 May 2016 agreed to the submission of the Impact Assessment Report to the 
Regulatory Scrutiny Board. 

9.1.3.  Consultation of the Regulatory Scrutiny Board 

The Impact Assessment Report was examined by the Regulatory Scrutiny Board on 22 June 
2016.  The  Board  gave  a  positive  opinion  on  24  June  2016,  asking  for  a  number  of 
improvements: 

-  better  explanation  why  the  current  notification  procedure  is  not  working  in  a  satisfactory 
manner; 

- better justification of the scope of the initiative;  

- a more logical link between the problem definition and the options, including the option to 
align the notifications procedure with that of the Professional Qualifications Directive or to 
extend the Single Market Transparency Directive to services; 

-  better  explanation  of  the  content  of  options  and  better  assessment  to  what  extent  the 
preferred  option  would  solve  the  problem,  i.e.  the  ineffectiveness  of  the  notification 
procedure. 

9.1.4.  Studies to support the IA  

No external study was undertaken in support of the impact assessment. An ex-post evaluation of the 
existing notifications procedure was undertaken by the Commission. 

9.2. Annex 2: Stakeholder consultation 

Introduction 

1. 
The Commission consulted stakeholders  to contribute to the evaluation of the current notification 
procedure  and  to  obtain  feedback  on  potential  improvements  to  the  existing  system.  The 
consultation  of  stakeholders  consisted  of  two  pillars:  (1)  a  public  consultation  of  interested 
stakeholders  through  an  EU  Survey  online  and  (2)  through  in-depth  discussions  with  institutional 
stakeholders  (Member  States  and  other  EU  institutions)  directly  concerned  by  the  notification 
procedure and its planned reform.  

52 

 
 
 
 
This  document  mainly  summarizes  the  results  gathered  through  the  online  public  consultation 
questionnaire, which was running from 26 January until 19 April, for a period of 12 weeks.  

The questionnaire notably invited stakeholders to share their views on issues such as  the effective 
enforcement  of  the  Single  Market  Rules  and  preventive  examination;  the  efficiency  of  existing 
notification  obligation  under  the  Services  Directive;  possible  measures  to  improve  the  current 
notification procedure; the impact of a notification procedure. 

The  last  section  provides  a  summary  of  the  discussions  with  institutional  stakeholders  which  took 
place  in  the  Expert  Group  on  the  Implementation  of  the  Services  Directive  including  bilateral 
exchanges (meetings, position papers), as well as the views expressed by other EU institutions. 

2.  Summary of Responses to the European Commission's 2016 Public Consultation 
Executive summary 
A  total  of  126  stakeholders  from  21  countries  responded  to  the  public  consultation.  Two  kinds  of 
respondents  were  representatives  of  the  business  community  (representatives  of  companies,  of 
chambers  of  commerce  or  chambers  of  professionals,  etc.)  and  more  than  20%  were  public 
authorities.  

Main outcome of the public consultation is as follows:  

  A large majority of stakeholders (80%) considered the current services notifications system not 
satisfactory, in particular public authorities who handle the notification procedure, as well as the 
business community.   

  The  consultation  shows  a  large  support  for  a  series  of  options  which  could  be  included  in  a 
forthcoming  initiative,  in  particular:  an  obligation  to  notify  draft  legislation  (77%);  increased 
transparency  of  the  notification  procedure  vis-à-vis  non-institutional  stakeholders  (70%); 
improvements  to  the  proportionality  test  undertaken  by  Member  States  (74%);  clearer  legal 
consequences of non-notification (79%). 

  Respondents  also  expressed  an  opinion  in  favour  of  extending  the  scope  of  the  current 
notification obligation to a series of measures covered by the Services Directive:  requirements 
related  to  prior  authorisations  (73%),  requirements  affecting  multidisciplinary  activities  (80%); 
requirements to hold a professional indemnity insurance (73%); services standards (71%). 

  Although some stakeholders identified a “standstill” period as a sensitive issue, most supported 
the  need  to  give  a  clear  timeframe  for  the  notifying  Member  State,  the  Commission,  other 
Member States and stakeholders to interact on a notified draft, before its adoption (65%).  

  Trends in responses differ between main stakeholders groups. Businesses support in particular 
enhancing transparency of the current notification procedure; clarifications and extension of the 
scope of the notification obligation; and measures to improve the Commission decision powers 
and  to  prevent  the  adoption  of  disproportionate  requirements  by  Member  States.  Public 
authorities were particularly supportive of clarifying the scope of the notification obligation and 
improving  the  current  procedure.  However,  although  overall  supportive,  some  of  them  were 
more critical as regards measures which would prevent disproportionate restrictions from being 
adopted.  

53 

 
 
 
 
 
 
 
 
  Views on impacts of possible actions: the impact of further EU action was considered positive by 
a large a majority of respondents, for the procedure itself (71%), the better functioning of the 
services markets (69%), enhanced  compliance by  Member  States on proportionality (67%) and 
more systematic notification (60%). 

  These results will feed into the impact assessment that DG GROW is currently preparing, and in 

particular to support the different policy options envisaged. 

3.  Overview of the respondents to the public consultation 

The  Commission  received  126  replies  from  individuals  and  organisations  in  response  of  its  online 
public consultation. The breakdown of respondents per group is as follows: 

Respondents by groups 

1% 

15% 

21% 

Business / representative 
of business  

Public authority  

63% 

Citizen 

Other 

The large majority of responses (63%) came from businesses and their associations, almost a quarter 
from  public  authorities  (21%)  and  further  replies  from  citizens  (15%)  and  other  organisations  (i.e. 
think tank) (1%).  

With respect to the geographical distribution, the respondents came from 21 countries (20 Member 
States  and  1  country  from  the  European  Economic  Area,  EEA),  in  particular  from  Poland,  Portugal 
and  Germany.  No  responses  were  submitted  from  the  following  states:  Bulgaria,  Croatia,  Ireland, 
Latvia, Luxemburg, Malta, Slovakia and Slovenia. The breakdown of replies per country is as follows: 

54 

 
 
 
 
 
 
 
 
 
 
Respondents by Member States 

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Poland  comes  out  clearly  as  the  largest  provider  of  responses,  with  a  total  of  53.  Nevertheless, 
responses  received  have  come  from  diverse  types  of  respondents  and  in  that  sense  did  not 
unbalance the overall trends observed amongst the other responses to the consultation: one public 
authority  at  State  level  handling  notifications  (Ministry  of  the  Interior  and  Administration);  one 
university  (classified  under  “other”);  and  multiple  types  of  representatives  of  the  business 
community: 49 service providers among which 5 large companies, 12 SMEs and 32 micro companies; 
one chamber of commerce; one business federation. 

4.  Consultations topics 

4.1.  Effective enforcement of the Single Market rules and preventive examination  

4.1.1. 

Importance of uniform application and effective enforcement of existing rules 

A  large  majority  of  the  respondents  (83%)  considered  a  uniform  application  and  effective 
enforcement of EU rules to be important. Most respondents (63%) believed that efforts should be 
stepped up to ensure rules are applied correctly. 20% of respondents find current policies sufficient.  

4.1.2. 

 Preventive examination to ensure proportionality of national requirements 

A majority of the respondents (54%) considered that an improved procedure for notifications of new 
national rules could help reinforce the uniform application of rules across the single market. 
Almost one third of  the respondents (29%) considered either the  existing preventive tools such as 
sharing knowledge and experience or the enforcement tools which allow for a check after adoption 
at national level to be sufficient to provide for a more uniform application of single market rules for 
services.  

Four out of five public authorities considered preventive examination necessary to ensure a more 
uniform application of single market rules for services whereas for business this is nearly 2 out of 3. 

55 

 
 
 
 
 
 
 
 
 
 
 
 
4.2.  Existing rules and procedures under the Service Directive as regards notification 

obligations 
4.2.1.  Effectiveness of the current notification procedure  

Most  respondents  who  replied  to  this  question  (80%)  were  of  the  opinion  that  the  current 
procedure  for  notifications  under  the  Services  Directive  is  either  not  working  or  considers  the 
procedure  to  be in  need  of  improvements. Close  to  three quarters  of  public  authorities  expressed 
this opinion and among business almost two third. 

4.2.2. 

 Shortcomings of the current notification procedure  

Around  8  out  of  10  respondents  indicated  at  least  one  shortcoming  in  the  current  notification 
procedure in the Services Directive.  

The questions asked under this section concern the current notification procedure, of which external 
stakeholders (business community and citizens) are currently not part and on which it therefore is 
difficult for this group to have an opinion as precise as public authorities might have in respect of the 
shortcomings of the existing procedure. This being said, external stakeholders did have clear views 
on how existing procedure should be improved in subsequent sections of the online questionnaire.    

In  terms  of  the  shortcomings  of  the  current  notification  procedure  in  the  Services  Directive  the 
group of respondents who replied to this question marked the following elements: 

  A  large  majority  of  respondents  (60%)  considers  the  fact  that  for  Member  States  and 
stakeholders  the notification obligations are not clear in terms of what national regulation 
should be notified as a shortcoming. 

  Half  of  the  respondents  (50%)  regards  the  fact  that  the  notification  procedure  is  not 

transparent for stakeholders as a shortcoming. 

  Close  to  half  (45%)  of  the  respondents  saw  the  following  as  shortcomings  in  the  existing 

procedure: 
o 

(I)  the  different  rules  exist  on  the  notification  obligation  for  establishment  and 
temporary provision of cross-border services; 
(II) the lack of clarity in terms of whether the notifying Member State must respond 
to comments issued by the Commission or other Member States; 
(III) the assessment by Member States; 
(IV)  whether  national  legislation/regulation  is  justified  and  proportionate  to  meet 
public policy objectives.  

o 

o 
o 

  Over  a  third of  respondents  (37%  and  34%) thinks  (I)  the fact that  notified  measures  have 
already  been  adopted  by  Member  States;  and  (II)  the  limited  time  to  react  to  notified 
legislation/regulation  and  prevent  the  adoption  at  national  level  are  shortcomings  of  the 
current procedure.   

  More than a quarter of respondents (27%) believe that Member States not respecting their 
notification obligations and the absence of a mechanism in place to stop such behaviour are 
a shortcoming of the current rules, with business representing almost three quarters of this 
group. 

  A  small  amount  of  respondents  (20%)  see  the  limited  possibilities  for  Member  States,  the 

Commission and stakeholders to intervene as a shortcoming. 

56 

 
 
 
4.3.  Measures to improve the current notification procedure for services 

4.3.1. 

 Elements to be included at EU policy level  

A large majority of respondents, including 69% of public authorities and 60% of the representatives 
of the business community, support EU action to improve the current notification obligation under 
the Services Directive. Only 15% of all respondents did not see the need for an EU action. 

An obligation to notify draft legislation, rather than notifying legislation already adopted at national 
level, was identified as an element which an EU level policy action should include, by nearly three 
quarters  of  the  respondents.  More  than  half  of  the  public  authorities,  including  those  handling 
notifications, recognized it as an element which could improve the current notification system under 
the  Services  Directive.  72%  of  the  business  community  supported  an  obligation  to  notify  draft 
legislation,  which  would  represent  an  improvement  compared  to  the  current  system  (see 
footnote)49. 

Nearly three quarters of respondents also considered that notifications should be made available to 
the  public,  supporting  an  increased  transparency  of  the  current  notification  procedure.  This 
argument  is  in  particular  supported  by  80%  of  the  business  community,  which  is  today  not 
associated  to  the  notification  procedure  taking  place  between  the  notifying  Member  States,  the 
Commission  and  other  Member  States.  More  than  60%  of  the  public  authorities  also  showed 
support to include such provision in a EU level policy action. 

A very large number of respondents (83%) also agreed to the introduction of clarifications about the 
scope of the notification obligation in an EU level policy action, i.e. about the type of measure which 
should  be  notified.  Among  them,  all  public  authorities  but  two  supported  such  improvement, 
indicating that it might contribute to improving their understanding of the current system.  

On the issue of scope, nearly 8 out of 10 respondents who shared their opinion on the matter also 
favoured  aligning  the  procedure  applicable  to  regulations  governing  the  temporary  cross-border 
provision of services with that applying to the freedom of establishment. 

The clarification of the procedure to notify (including the different steps by which a public authority 
has  to  go  through,  the  way  to  handle  comments  from  the  Commission  and  other  Member  States, 
etc.)  was  also  identified  as  an  improvement  that  an  EU  level  action  could  bring,  by  81%  of  all  the 
respondents, among which 22 public authorities and 77% of the business community. Respondents 
who  offered  a  more  detailed  response  in  their  comments  underlined  that  the  system  currently  in 
place  under  the  existing  notification  system  for  goods  provides  a  clear  procedure  for  goods  and 
information society services, and could be used as an inspiration for services. 

49Examples  were  shared  in  reference  to  the  existing  notification  system  for  goods  under  which  such  an 
obligation is already operative and contributes to the compliance of Member States and overall efficiency of the 
notification  procedure.  Some  respondents  showed  support  for  such  obligation  to  be  complemented  by  a 
provision  specifying  at  what  point  in  the  legislative  process  Member  States  could  be  required  to  notify  a 
legislative initiative. 

57 

 
 
 
 
 
 
 
 
 
                                                 
 
The introduction of a clear timeframe in the existing notification procedure is supported as a feature 
of a future EU level policy action by 65% of the respondents. This was the case of 65% of the public 
authorities and 73% of the representatives of the business community at large. Only a limited share 
of the respondents (23%) considers that such a provision is not necessary, some underlining that the 
current system already provides sufficient flexibility and clarity in this respect. 

The  introduction  of  an  obligation  for  Member  States  to  provide  a  thorough  proportionality 
assessment was supported by three quarters of the respondents (74%) who expressed an opinion. 
Among those supporters, emphasis was put on the importance of the proportionality check prior to 
a  national  regulation  on  services,  to  evaluate  consequences  on  the  competition  in  the  services 
market in particular, and the functioning of the single market in general.  Several respondents also 
alerted  that  additional  obligations  for  Member  States  to  improve  their  proportionality  test  should 
not generate undue costs for administrations. 

The improvement and clarification of the legal consequences of non-notification by a Member State 
was considered one of the most important features that an EU level policy action could include, with 
the support of almost 80% of the respondents, including 80% of the public authorities and 78% of 
the business community. Respondents recognized that the absence of the legal consequences is an 
important shortcoming of the current notification system. 

More  than  half  of  the  respondents  supported  the  need  to  introduce  instruments  to  prevent 
disproportionate  requirements  from  being  adopted  at  national  level.  Among  them,  nearly  60%  of 
public  authorities,  which  are  handling  notifications  at  local,  regional  or  national  level.  In  addition, 
almost 70% of the representatives of the business community who took position on this question, 
indicated their support. 

4.3.2. 

 National regulatory requirements to be covered by notification obligations 

Most  respondents  expressed  their  support  to  expanding  the  current  notification  obligation  for 
services to include other measures and requirements. 

Almost  half  of  the  respondents  who  took  a  position  did  not  consider  the  current  scope  of  the 
notification obligation under the Services Directive satisfactory. 

Requirements  related  to  prior  authorisations  and  their  procedures  for  access  and  exercise  of  the 
service  activity  should  additionally  be  covered,  according  to  73%  of  respondents  who  shared  an 
opinion on the matter. 

Many respondents from both pubic authorities and the business community expressed support for 
the introduction of requirements affecting multidisciplinary activities (50% and 54%).  

At the same  time,  requirements  to  hold a  professional  indemnity  insurance  should  additionally  be 
covered  by  a  notification  obligation,  according  to  nearly  three  quarters  of  the  respondents  which 
expressed an opinion on the matter.  

58 

 
 
 
 
 
 
 
 
 
 
 
 
More than three quarters of respondents support the notification obligation to also cover  services 
standards. 

Finally, more than 70% of respondents which expressed an opinion on whether they agree or not to 
extend the notification obligation to  requirements affecting commercial communication supported 
the idea. 

4.3.3. 

 Procedural clarifications to be provided  

Most respondents indicated the need to provide procedural clarifications to the existing notification 
procedure on several matters. 

More than 8 out of 10 respondents (85%) supported the  need to specify what type of information 
should be submitted by the notifying authority together with the notified legislation. This degree of 
support was echoed by public authorities (85%). 

In  addition,  more  than  three  quarters  of  the  respondents  (78%)  indicated  that  clarification  on  the 
timing  by  which  the  Commission,  Member  States  and  stakeholders  would  be  able  to  react  to 
notifications is necessary. This was supported by 70% of public authorities and stakeholders (more 
than 80% of business representatives and 84% of citizens). 

The  introduction  of  a  fixed  timeframe  for  notifying  Member  States  to  respond  to  comments  and 
reactions from the Commission, other Member States and stakeholders, was supported by nearly 8 
out  10  respondents  (79%).  This  included  three  quarters  of  the  public  authorities  and  of 
representatives of the business community. 

Respondents supported widely the idea to provide, in a forthcoming EU wide initiative, clarifications 
on  when  and  how  stronger  measures  can  be  taken  by  the  Commission  against  disproportionate 
requirements.  Three  quarters  of  them  answered  favourably,  whereas  only  10%  showed 
disagreement.  

4.3.4.  Actions to prevent disproportionate restrictions 

Most  respondents  favoured  actions  to  prevent  the  adoption  of  disproportionate  restrictions  by 
Member States. 

Only  one  third  of  respondents  (35%)  expressing  an  opinion  judged  that  the  existing  system  which 
allows the Commission and Member States to discuss notifications is sufficient to prevent Member 
States  from  adopting  disproportionate  restrictions.  On  the  other  hand,  two  third  of  those 
respondents  found  the  existing  system  to  be  insufficient  including  in  particular  68%  of  the 
representatives from the business community which expressed their opinion on the matter. 

Respondents expressed disagreement on the fact that the existing system allowing the Commission 
to  adopt  a  legal  Decision  is  sufficient  to  prevent  Member  States  from  adopting  disproportionate 

59 

 
 
 
 
 
 
 
 
 
 
 
 
 
restrictions.  Nearly  three  quarters  of  the  respondents  which  expressed  an  opinion  on  the  matter 
indicated so. 

A  majority  of  respondents  among  those  who  took  position,  agreed  that  the  Commission  should 
always be entitled to adopt a legal Decision on a notification, irrespective of whether this concerns 
temporary cross-border provision of services or the freedom of establishment. 

In  addition,  among  those  who  expressed  an  opinion,  a  majority  of  respondents  agreed  that  a 
"standstill" period could be useful whereby the national legislative procedure is paused for a certain 
period  (e.g.  prior  to  the  adoption  of  a  law  by  the  national  parliament),  in  order  to  allow  the 
Commission, other Member States and stakeholders to comment and react to the draft legislation. 

According  to  more  than  two  third  of  respondents  who  expressed  their  opinion  (64%),  the 
Commission  should  always  be  entitled  to  adopt  a  detailed  opinion  following  the  model  applied  to 
the  notification  procedure  for  the  goods  sector.  Among  these  respondents,  this  position  was 
supported by two third of the public authorities, and three quarters of the representatives from the 
business community. 

The  issue  of  inapplicability  of  new  measures  introduced  by  Member  States,  in  case  of  failure  to 
notify based on the existing jurisprudence in the goods sector, was met with divergent views from 
respondents. Three quarters of the respondents took a position on the matter, with 51% disagreed 
and 49% agreed for such clarification to be introduced in an EU level action. 

With  only  less  than  three  quarters  of  respondents  taking  position  on  the  matter,  around  60% 
disagreed with the idea that Member States should only be allowed to adopt legislation/regulation if 
they have obtained prior approval from the Commission. 

4.3.5. 

 Measures to address proportionality assessment  

A very large share of respondents supported measures to strengthen the proportionality assessment 
undertaken by Member States when notifying. 

Nearly three quarters (71%) of respondent which replied to the question disagreed that the current 
situation is satisfactory and that there is no need for further action. 

Similarly, three quarters of the respondents replying to the question agreed that a legal obligation 
for Member States to submit proportionality assessments should be introduced. 

More than 8 out of 10 respondents who expressed their opinion on the matter considered that the 
Commission should support proportionality assessment by Member States for particular areas (e.g. 
an analytical framework to guide assessment).  

4.4.  Impact of a revised notification procedure under the Service Directive 

60 

 
 
 
 
 
 
 
 
 
 
 
 
 
The  notification  procedure  at  the  level  of  the  Member  State  is  under  the  responsibility  of  public 
authorities.  Companies,  professional  organisations  or  citizens  do  not  intervene  directly  in  the 
notification  process.  Therefore,  the  relevant  information  on  the  modification  of  the  process  of 
notification  or  on  the  administrative  costs  is  essentially  provided  by  the  respondents  from  public 
authorities. 

Replies submitted by the public authorities represent less that one fifth of all replies (18%). Almost 
all the authorities who replied to the public consultation (88%) are public authorities in charge of the 
notification process. 

4.4.1. 

 Changes to national processes linked to the notification obligation 
Among  the  replies  provided  by  public  authorities  (26  replies),  only  a  limited  number  of  national 
authorities  considered  that  the  new  procedure  would  require  significant  changes  on  their  part 
compared to the current notification obligation (19%). 

For 38% of public authorities, the new notification procedure would not imply any changes or only 
limited changes in that regard. 

More  than  one  third  of  the  public  authorities  (35%)  do  not  know  what  will  be  the  impact  of  the 
revised notification procedure. 

It  results  from  the  100  replies  provided  by  the  respondents  other  than  the  public  authorities 
(companies, professional organisations, citizens) that a large part of them do not know what will be 
the impact on the fulfilment of the current notification obligation on Member States (40%). 

As regard the remaining respondents (60%), most of them (36%) consider that the new procedure 
will have a significant impact, whereas for 21% there will be no changes or only limited changes. 

4.4.2.  Costs for public authorities 

As regards costs for public administrations, it follows from the replies provided by public authorities 
that they expect some features of the new notification procedure to have an impact on costs, but 
not all.  

Most public authorities consider the introduction of the following elements not to lead to a notable 
increase in costs: an obligation to notify draft legislation (50% approve, 35% disagree), strengthening 
the  obligation  to  provide  a  proportionality  assessment  (38%  approve,  35%  disagree)  and  the 
introduction of a consultation period (46% approve, 38% disagree). 

On the contrary, extending the scope of the notification obligation to align it with the scope of the 
Services Directive will have an impact on costs according to 54% of public authorities' respondents 
and no impact for 15%. 

As  regards  making  notifications  transparent for  stakeholders,  most  public  authorities  do  not know 
the impact on the costs (35%). The remaining respondents are equally split between increase of the 
costs and no notable impact on costs. 

4.4.3.  Overall impact  

An overwhelming majority of respondents agree that the Commission proposal will have a positive 
impact. It will improve the notification procedure (71% approve, 6% disagree), will contribute to a 

61 

 
 
better functioning of services markets overall (69% approve, 12% disagree), Member States will take 
the principle of proportionality more seriously (67% approve, 13% disagree) and Member States will 
notify  more  measures,  more  systematically  and  provide  more  information  (60%  approve,  14% 
disagree). 

An overwhelming majority of respondents (72%) who gave their opinion consider that the modified 
notification  procedure  will  have  an  impact  in  practice.  The  proportion  of  public  authorities,  which 
expressed  their  views  on  that  point  and  consider  that  the  new  procedure  will  have  a  practical 
impact, reaches 84%. 

It also stems from the consultation that the modified notification procedure would result in changes 
at national level. For 38% of respondents, the new procedure will possibly impact on national 
procedures for adopting national legislation/regulation, whereas 26% disagree with that conclusion. 
The proportion of public authorities considering that the modified notification procedure would 
result in changes at national level is also 38%. Around 30% of businesses share the same view.  

5.  Additional feedback from institutional stakeholders 
Discussions  on  the  evaluation  of  the  current  notification  procedure  with  institutional  stakeholders 
started before the launch of the public consultation. Member States contributed to this evaluation in 
the  Expert  Group  on  the  Implementation  of  the  Services  Directive.  Since  March  2015,  several 
substantive  debates  took  place  within  the  Expert  Group  to  address  specific  questions  on  the 
notification obligation and possible shortcomings. During these meetings, Member States explained 
to the Expert Group what arrangements were taken within their government structures to fulfil the 
obligation  to  notify.  A  majority  of  Member  States  have  appointed  a  central  (contact)  point  within 
their government structure. 

National  experts  expressed  divergent  views  in  respect  of  the  scope  of  the  current  obligation  in 
Article 15 and Article 39 with a majority considering the scope of the obligation clear enough. As to 
coherence  in  terms  of  other  types  of  requirements  for  which  no  notification  obligation  exists  the 
Expert Group was divided with a group in favour of also covering authorisation requirements and a 
group which considers the current scope sufficient for a proper functioning of the Services Directive. 
Overall  Member  States'  representatives  considered  the  current  procedure  sufficient  to  assess  and 
comment on one and others notifications. Some improvements in the used system (Internal Market 
Information System, IMI) would be welcomed. It became also clear that one Member State has the 
obligation to notify draft measures present in its law and another Member State has a provision in 
place which explains the legal consequence of not notifying. 

In addition discussions also tackled issues of a "standstill" period, the national consultation process 
and transparency, with a clear majority in favour of transparency, but views in respect of a standstill 
period were divided. Some Member States question the overall necessity of such a period to have a 
proper functioning notification procedure. 

Questions in relation to the consequence of not notifying turned out difficult for the Member States, 
with hardly any taking a stance on this. 

Experts  also  discussed  administrative  costs  of  the  notification  obligation.  Estimated  figures  on  the 
notification  procedure  were  presented  and  discussed.  National  experts  provided  detailed 

62 

 
 
information  on  the  average  man-hour  to  prepare  and  process  a  notification.  In  addition  to  the 
discussions  in  the  Expert  Group  meetings,  institutional  stakeholders  provided  relevant  inputs 
through  position  papers  and  bilateral  meetings  with  the  Commission.  Most  of  the  countries  that 
shared their views on the notification  obligation under the Services Directive stressed the need to 
ensure that the process applies to draft laws and to make notifications publicly available (i.e. online) 
so that businesses have the opportunity to react. 

Several Member States also called for a proper timeframe allowing all the stakeholders to react to 
notifications.  According  to  some,  proportionality  assessment  as  well  as  clarifications  on  the 
notification obligation and the procedure should also be granted.   

Furthermore,  during  bilateral  meetings,  two  Member  States  expressed  a  clear  opposition  to  a 
"standstill"  clause.  However,  according  to  one  of  these  two,  a  consultation  mechanism  should  be 
found  to  ensure  other  Member  States,  the  Commission  and  stakeholders  could  react  to  notified 
measures and allowing for an interaction with the  notifying  Member State prior to its adoption of 
the notified measure.  

The  European  Parliament  and  the  Council  of  the  European  Union  have  also  contributed  to  the 
reflexion  on  the  notification  procedure.  The  Committee  for  Internal  Market  and  Consumer 
Protection  (IMCO)  of  the  European  Parliament  issued  the  following  draft  reports  including 
comments on the notification procedure of the Services Directive: 

1.  The draft report on the Single Market Strategy (2015/2354(INI)).50Paragraph 26 indicates the 
following: the IMCO Committee "Emphasises, in respect of the single market in services, that 
there  is  a  clear  need  to  improve  the  cross-border  provision  of  services;  urges  the  Member 
States  to  ensure  proper  and  more  effective  application  of  the  Services  Directive,  while 
avoiding  the  practice  of  gold-plating;  welcomes  the  Commission  proposal  to  improve 
notification  under  the  Services  Directive;  agrees  to  extend  the  notification  procedure 
provided for in Directive 2015/1535 to all the sectors not covered by that directive" 

2.  The draft report on Non-Tariff Barriers in the Single Market  (2015/2346(INI))51. Paragraphs 
21 and 23 indicate the following: the IMCO Committee "21.Draws attention to the problems 
for  service  providers,  especially  in  business  services  and  construction,  stemming  from 
multiple  authorisations,  registration  or  prior  notification  requirements;  […]  23.  Emphasises 
that the notification obligation contained in the Services Directive could have been effective 
in  reducing  or  eliminating  NTBs,  but  has  been  neglected  by  Member  States  and  the 
Commission;  welcomes,  therefore,  the  renewed  focus  on  the  notification  procedure  in  the 
Single  Market  Strategy,  as  through  early  engagement  as  regards  proposed  regulatory 
measures,  disproportionate  national  measures  can  be  revised  to  resolve  issues  before  they 
occur" 

50http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+COMPARL+PE-
573.011+01+DOC+PDF+V0//EN&language=EN 
51  The  draft 
%2f%2fEP%2f%2fNONSGML%2bCOMPARL%2bPE-573.111%2b01%2bDOC%2bPDF%2bV0%2f%2fEN 

available  online  http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-

report 

is 

63 

 
 
                                                 
In its Conclusion on 19 February 2015,52 the Council of the European Union stressed "the benefits of 
requiring  Member  States  to  notify  new  requirements  on  services  and  service  providers,  inter  alia, 
such as for legal form and shareholding and authorisation schemes so as to highlight any restrictions 
that  may  be  disproportionate  or  unjustified,  and  with  a  view  to  the  phasing  out  of  all  such 
restrictions as soon as possible" and called "upon the Commission, working with Member States, to 
increase  the  effectiveness  of  the  notification  procedure  under  Directive  2006/123/EC,  including  by 
providing  clear  guidance  as  to  the  notification  obligations  and  making  notifications  public  and 
transparent as is the case for goods". 

The  need  for  an  improved  notification  mechanism  was  also  highlighted  by  the  European  Court  of 
Auditors  in  its  report  on  the  implementation  of  the  Services  Directive  (Special  report  No  5/2016; 
published on 14 March 201653): “whereas the single market for goods is well developed in terms of 
intra-EU trade, the  services market is widely recognised  to have not achieved its full potential. The 
Services  Directive  addresses  services  activities  covering  approximately  46  %  of  EU  gross  domestic 
product  (GDP),  with  the  aim  of  reducing  legal  and  administrative  barriers  to  both  providers  and 
recipients of services. This should be achieved by Member States (MSs) through legal transposition of 
the Directive, increased transparency and simplified procedures which make it easier for businesses 
and  consumers  to  provide  or  receive  services 
its  specific 
recommendations,  the  Court  of  Auditors  suggests  that  “the  legislator  should  introduce  a  standstill 
period  for  the  notification  of  draft  requirements  and  ensure  that  they  are  published  on  a  publicly 
available website to allow better access and timely scrutiny”. 

in  the  single  market”.  Among 

9.3.  Annex 3: Practical implications of the initiative for the affected 

parties: who is affected an how 

Stakeholders  who  would  be  affected  by  the  initiative  as  contained  in  the  preferred  policy 
option 5a: 

  National authorities will be affected by the obligation to notify drafts. In order to fulfil 
the  obligations  stemming  from  the  notification  procedure,  they  will  have  to  make  sure 
that measures covered by the notification obligation will be notified in IMI at least three 
months  prior  to  the  adoption  of  the  measure.  This  will  require  an  adaptation  of  the 
internal system to fulfil the obligation. National authorities will have to decide within the 
legislative process, when the appropriate time for the notification will be in order to have 
a  sufficiently  developed  measure  to  be  notified  but  at  the  same  time  also  provides  for 
enough  time  (3  months)  to  have  a  proper  dialogue  with  the  Commission  and  the  other 
Member  States  and  to  take  account  of  comments  received.  Option  5a  does  leave  that 
room for assessment. 
The other impact will stem from the fact that the system will be made transparent. It is 
likely  that  the  notifying  Member  State  will  receive  comments  from  stakeholders  who 
previously  would  not  have  been  aware  of  the  intention  to  introduce  new  requirements. 
Although this option will not oblige Member States to take the comments on board, they 
could  play  a  role  in  the  final  discussions  on  the  requirements.  Transparency  will  also 

52Council  Conclusions 
6197/15, 
http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%206197%202015%20INIT 
53 http://www.eca.europa.eu/Lists/ECADocuments/SR16_05/SR_SERVICES_EN.pdf   

Single  Market 

Policy,  Ref. 

on 

19 

February 

2015 

64 

 
 
 
                                                 
improve,  together  with  the  introduction  of  a  specific  provision  dealing  with  the 
consequences  of  non-compliance,  to  an  increase  of  notifications  for  those  Member 
States currently not complying with the notification obligation. Member States will have 
to  make  sure  that  the  obligation  is  correctly  met  by  public  authorities  at  all  layers  of 
government.  The  Services  Directive  also  applies  to  regional  and  municipal  levels  of 
government. 
The  extension  of  the  scope  of  the  notification  obligation  to  also  cover  authorisation 
schemes, multidisciplinary activities and professional indemnity insurance will lead to an 
increase in compliance costs for all Member States. Given the regulatory activity noted 
on  previous  occasions,  this  will  lead  to  more  requirements  being  covered  by  the 
notification obligation which will  therefore result in  more notifications. Member States 
will  have  to  make  sure  that  prior  to  the  introduction  of  relevant  changes  to  the 
requirements concerned the notification will take place.  
The information to be provided by Member States will in general also be more extensive, 
as  per  notification  more  details  have  to  be  provided  in  terms  of  the  proportionality 
assessment undertaken by the notifying Member State. The assessment as such will have 
to  be  made  on  the  basis  of  the  current  conditions  of  the  Services  Directive,  but  the 
reporting on these issues has not been consistent over the years, and will be part of the 
notification obligation and might slightly increase the time spent on each notification. 
On the other hand, a more effective notification procedure will improve the compliance 
of adopted national measures with the Services Directive and thereby reduce the need for 
legal enforcement action and associated administrative costs for Member States. 

  The Commission will see an increase in notifications as a result mainly of the widening 
of the scope of the notifications obligations. This increase will first impact the workload 
of the Commission  and  further see an increase in  terms of costs related to translations. 
Transparency  will  also  result  in  the  Commission  receiving  comments  from  external 
stakeholders  which  will  have  to  be  assessed  in  the  framework  of  the  notification 
obligations which will result in an increased workload. 
The obligation to provide more information in respect of the proportionality assessment 
undertaken  by  the  Member  State  will  also  see  an  increase  in  translations  costs  (more 
reporting),  but  at  the  same  time  facilitate  the  work  of  the  Commission  in  terms  of 
assessing  the  compatibility  of  the  national  measure  with  EU  law  which  will  lead  to  a 
reduction of the workload. 

  Service  providers  wanting  to  benefit  from  the  opportunities  the  Single  Market  for 
services  offers  will  see  their  opportunities  widen.  Firstly,  a  more  effective  notification 
procedure will contribute to fewer unjustified regulatory barriers, facilitating the freedom 
of  establishment  and  the  freedom  to  provide  cross-border  services.  For  SMEs  in 
particular  fewer  unjustified  barriers  will  mean  lower  adaptation  costs  to  the  various 
requirements  the  different  Member  States  have  in  place  and  therefore  additional 
opportunities to benefit from the freedom to provide cross-border services will increase. 
Secondly, this initiative will also introduce a transparent system for external stakeholders 
in respect of the notification procedure. As a result, businesses will have easier access to 

65 

 
 
 
 
information on changing requirements and the opportunity to provide comments on the 
planned introduction of regulatory measures. 

9.4.  Annex 4: Estimation of costs for public authorities 

1.  Estimation  in  terms  of  increase  of  notifications  when  all  Member  States  fulfil  the 
current notification obligation stemming from the Services Directive 

Table  1  (as  presented  in  the  Annex  5:  Evaluation  report  –  Notification  procedure  of  the 
Services Directive) shows the overview of the number of notifications received per Member 
State per year from 2010 (start of the notification obligation) until end of 2015. 

Member State 
Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy  
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
Total 
Table 1 Number of notifications per Member State in the period 2010-2015. 

2011 
14 
0 
0 
NR 
2 
0 
1 
2 
0 
1 
67455 
0 
1 
0 
5 
0 
5 
0 
0 
57 
0 
0 
0 
0 
7 
1 
19 
0 
789 

2010 
1 
0 
1 
NR 
1 
0 
1 
1 
0 
0 
52 
0 
4 
0 
6 
1 
0 
0 
0 
64 
0 
0 
0 
0 
0 
0 
6 
1 
139 

2012 
11 
2 
1 
NR 
4 
0 
2 
0 
0 
10 
0 
0 
7 
0 
6 
0 
23 
3 
0 
16 
0 
1 
1 
0 
1 
1 
15 
1 
105 

2013 
6 
0 
3 
0 
0 
12 
0 
0 
0 
15 
0 
0 
11 
0 
4 
3 
0 
0 
0 
21 
0 
0 
0 
0 
0 
0 
19 
0 
94 

2014 
7 
19 
2 
61 
6 
0 
6 
1 
0 
13 
5 
0 
22 
0 
1 
12 
1 
1 
0 
5 
0 
0 
1 
0 
3 
8 
48 
3 
225 

2015 
1 
5 
0 
0 
2 
14354 
2 
0 
0 
13 
12 
0 
14 
0 
4 
2 
0 
0 
0 
51 
1 
6 
0 
0 
0 
0 
29 
2 
287 

Total 
40 
26 
7 
61 
15 
155 
12 
4 
0 
52 
743 
0 
59 
0 
26 
18 
29 
4 
0 
21456 
1 
7 
2 
0 
11 
10 
136 
7 
1639 

54  127  notifications  on  the  same  issue:  a  prohibition  of  door-to-door  sales  of  goods  and  services,  notified  by 
different municipalities. 
55 620 notifications on either funeral services or cleaning services, notified by different municipalities. 
56  Some  notifications  concern  the  'General  Municipal Ordinance'  or  'Building Ordinance'  notified  by  different 
municipalities. 

66 

 
 
 
 
 
                                                 
In  order  to  estimate  the  average  amount  of  notifications  per  Member  State  per  year  if  all 
Member States would fulfil the current notification obligation of the Services Directive, the 
Commission used the following calculations.  

Based on the overall, the average amount of notifications per Member State per year is:  

Member State 
Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy  
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
EU average 
Table 2 Average amount of notifications per individual Member State per year  

Average 
6.7 
4.3 
1.2 
20.357 
2.5 
4.758 
2 
0.7 
0 
8.7 
20.559 
0 
9.8 
0 
4.3 
3 
4.8 
0.7 
0 
35.7 
0.2 
1.2 
0.3 
0 
1.8 
1.7 
22.7 
1.2 
13 

The top 11 notifying Member States notified on average 13 notifications per year. Applying 
this average to all Member States would result in 364 notifications per year, on average 91 
notifications in addition to the current average over the period 2010-2015 (273 notifications 
on average per year). 

2. Estimation of the baseline administrative costs related to the notification obligation 

The  Commission  has  requested  during  a  meeting  of  the  Expert  Group  on  the  Services 
Directive60 information from the Member States in terms of time spend per notification and 
the  cost attached  to  this  (FTE).  Unfortunately,  Member  States  were  unable  to  provide  such 

57 Croatia was not yet a Member of the EU in the years 2010-2012 the amount of notifications of this country 
was divided by 3.  
58 For statistical purposes the excess 127 (see footnote 1) was deleted from the calculations.  
59 For statistical purposes the excess 620 (see footnote 2) was deleted from the calculations. 
60 Expert group on Services Directive meeting of 16 July 2015. 

67 

 
 
                                                 
information due to the fact that the task to notify is part of officials' total work package and 
therefore difficult to separate in terms of time spent. 

A more recent call for information in respect of the administrative costs to a smaller group of 
Member  States  resulted  in  information  in  terms  of  the  hours  spent  per  notification  and  the 
level  of  the civil  servant  occupied  with the  notifications61.  Based  upon this  information  the 
European  Commission  presented  members  of  the  Expert  Group  prior  to  the  meeting  taking 
place on 25 April 2016 with estimates and the request to inform the Commission during the 
meeting on 25 April whether the average values were reasonable.  

These average figures presented: 

  Preparation  of  a  notification  (including  coordination  with  line  Ministry):  10  man 

hours per notification 
Authorities  will  have  to  determine  whether  a  measure  needs  to  be  notified. 
Furthermore  the  notification  has  to  be  written  (complexity  of  a  measure  has  an 
influence  on  the  time  necessary).  Finally  consultations  need  to  take  place  with 
relevant authorities. 

  Processing of notification in IMI: 2 man hours per notification 

The information needs to be uploaded in the Internal Market Information system. 
  Processing  comments  received  from  the  Commission  or  other  MS,  including 

providing a response: 5 man hours per notification62 
Comments  need  to  be  analysed  in  terms  of  content  and  the  competent  authority 
responsible for the reply needs to be determined. Answers to the comments need to be 
prepared, coordinated with relevant other authorities and afterwards uploaded in IMI 
  Providing  a  comment  on  a  notification  made  by  another  MS:  4  man  hours  per 

notification63 
The notification needs to be assessed by responsible authority. Coordination needed to 
determine whether comments should be made. Comments need to be formulated and 
coordinated with relevant authorities. Afterwards the comments need to be uploaded 
in IMI. 

In general, notifications are handled by academically trained lawyers. 

During the discussion at the 25 April 2016 Expert Group meeting, FR, HR, IT, PT  and BE 
considered  the  above  values  presented  in  terms  of  the  preparation  and  processing  of  a 
notification to be too low. On the other hand, DK, NO, AT, EE and FI argued that the above 
figures are overestimated. From the group of Member States on which the average values was 
based, both NL and SE calculate more man hours in order to fulfil the notification obligation 
(preparation  and  processing)  whereas  the  others,  UK,  HU,  PL  and  DE  indicated  less  man 
hours. Other Member States have not reacted. 

Member  States  were  unanimous  in  that  the  estimated  average  of  5  man  hours  annually 
necessary to reply to questions and comments from the Commission and other Member States 
is too low.  

61 Request was sent to Sweden, United Kingdom, Netherlands, Hungary, Poland, France, Portugal and Germany. 
The Commission did not receive an answer from France and Portugal. 
62  Based  on  the  frequency  with  which  the  Commission  and  other  Member  States  submit  comments  (period 
2014-2015). The average is commenting on 1 notification per Member State per year. 
63 Based on the frequency with which other Member States submit comments (period 2014-2015) the average is 
commenting on 1 notification per Member State per year. 

68 

 
 
 
                                                 
Based  on  this  feedback,  the  Commission  decided  to  apply  the  following  averages  for  the 
calculation of the administrative costs stemming from this policy initiative (relevant for the 
Impact Assessment): 

Preparation  of  a  notification  (including  coordination  with  line  Ministry):  10  man 

- 
hours per notification; 

- 

Processing of notification in IMI: 2 man hours per notification; 

Processing  comments  received  from  the  Commission  or  other  MS,  including 

- 
providing a response: 8 man hours per notification; 

Providing  a  comment  on  a  notification  made  by  another  MS:  4  man  hours  per 

- 
notification. 

Description  of 
required action 

the 

Tariff 
(hour) 

Time 
(hour) 

per 

Price 
notification 
in euro 

Frequency 
(per year) 

Preparation 
notification 

of 

a 

32.1 

10 

€321 

Processing 
notification in IMI 

of 

32.1 

Processing  comments 
received 
following 
notification 

32.1 

Commenting 
notification other MS 

32.1 

2 

8 

4 

€64 

€257 

€128 

13 

13 

1 

1 

Total 
administrative 
burden 
in 
euro annually 

€4173 

€832 

€257 

€128 

Table 3 Overview of the average baseline administrative burden per year based on the average EU amount of 
notifications (see table 2). 

Table 3 provides and overview of the average baseline administrative burden per notification 
based on the average frequency for the EU. The tariff per hour is based on the "2006 Mean 
Hourly Earnings By Main Economic Activity And Occupation*  + adjustment to 2010 Prices 
+ Nonwage Labour Costs + 25% Overhead ESTAT: Structure of Earnings Survey  - NACE 
rev 1.1: C to O not L." 

Table 4 provides an overview per Member State of the administrative cost based on the EU 
frequency average and based on the individual Member State frequency average on the years 
2010-2015.  Also  here  the  tariff  per  hour  is  based  on  the  "2006  Mean  Hourly  Earnings  By 
Main Economic Activity And Occupation*  + adjustment to 2010 Prices + Non wage Labour 
Costs + 25% Overhead ESTAT: Structure of Earnings Survey - NACE rev 1.1: C to O not L." 

To calculate the administrative cost, the Standard Cost model (SCM) is used.  Administrative 
burden  is  calculated  on  the  basis  of  the  average  cost  of  the  required  administrative  activity 
(Price) multiplied by the total number of activities performed per year (Quantity). The cost is 
generally estimated by multiplying a tariff (based on average labour cost per hour including 
overheads) and the time required per action. Other types of costs (outsourcing, equipment or 
supplies’ costs, etc.) are not taken into account. 

The quantity is calculated as the frequency of required actions multiplied by the number of 
entities concerned. The core equation of the SCM is P x Q, where  

69 

 
 
 
 
 
 
 
 
 
 
 
- P: costs of an administrative action are determined according to Tariff * Time 

- Tariff: gross wage, wage costs and material and overhead costs. 

- Time: the variable time should be taken to mean the time (in minutes or hours) that it takes 
a business to perform a certain activity. 

-  Q:  number  of  times  that  the  message  is  delivered  per  year  (number  of  businesses  * 
frequency). This should be used for the amount of notifications received for the various years 
in order to estimate the administrative burden. 

Member State  Tariff 
in euro 

Price per 
notification 
in euro64 

MS yearly 
average 
based on 
their 
notification 
between 
2010-2015  

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Republic 

Denmark 
Estonia 
Finland 
France 
Germany 

Greece 
Hungary 
Ireland 
Italy  
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 

Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 

United Kingdom 
EU average 

38,4 
49,3 
3,80 
31,30 
11,70 

45,70 
8,80 
36,10 
39,20 
42,50 

26,30 
8,50 
41,60 
38,90 
6,30 
6,30 
50,80 
16,60 
35,50 

13,00 
22,20 
6,50 
9,80 
19,70 
27,60 
36,80 

38,20 
32,10 

6.7 
4.3 
1.2 
2.5 

25.8 
2 
0.7 
0 
8.7 
123.8 

0 
9.8 
0 
4.3 
3 
4.8 
0.7 
0 
35.7 

0.2 
1.2 
0.3 
0 
1.8 
1.7 
22.7 

1.2 
13 

460,8 
591,60 
45,60 
375,60 
140,40 

548,40 
105,60 
433,20 
470,40 
510,00 

315,60 
102,00 
499,20 
466,80 
75,60 
75,60 
609,60 
199,20 
426,00 

156,00 
266,40 
78,00 
117,60 
236,40 
331,20 
441,60 

458,40 
385,20 

Total 
administrative 
burden based 
on EU 
frequency (full 
compliance by 
all- 13 
notifications 
annually)  in 
euro 
5990,4 
7690,80 
592,80 
4882,80 
1825,20 

7129,20 
1372,80 
5631,60 
6115,20 
6630,00 

4102,80 
1326,00 
6489,60 
6068,40 
982,80 
982,80 
7924,80 
2589,60 
5538,00 

2028,00 
3463,20 
1014,00 
1528,80 
3073,20 
4305,60 
5740,80 

5959,20 
5007,60 

Total 
administrative 
burden based 
on  MS average 
in euro 

↓ 3087,36 
↓ 2543,88 
↓ 54,72 
↓ 939,00 
↑3622,32 
↓ 1096,80 
↓ 73,92 
↓ 0,00 
↓ 4092,48 
↑ 63138,00 
↓ 0,00 
↓ 999,60 
↓ 0,00 
↓ 2007,24 
↓ 226,80 
↓ 362,88 
↓ 426,72 
↓ 0,00 
↑ 15208,20 
↓ 31,20 
↓ 319,68 
↓ 23,40 
↓ 0,00 
↓ 425,52 
↓ 563,04 
↑ 10024,32 
↓ 550,08 
5007,60 

64 Assuming 12 hours for processing and preparing notification. The estimate does not take into account time 
concerning processing comments as not all notifications result in any comments. 

70 

 
 
                                                 
Table 4 Total baseline administrative burden per individual Member  State per year based on EU average and 
individual Member State average. 

Table  4  shows  the  baseline  administrative  burden  assuming  full  compliance  with  the 
notification obligation i.e. under the assumption that each Member States submits on average 
13  notifications  per  year  compared  to  the  administrative  burden  calculated  on  the  achieved 
average per Member States in period 2010-2015. The arrows in the last column show whether 
the current costs borne by Member States are lower or higher than the estimated EU average 
of  full  compliance  with  the  current  notification  obligation.  For  example,  it  means  that  the 
Netherlands  spend  on  average  €15208.20  annually  to  meet  the  notification  obligations 
compared to €5538 assuming the EU average level of compliance of 13 notifications per year. 
On the other side,  Slovakia, Ireland, Malta and Finland don't spend anything compared to the 
average annual cost assuming the EU average level of compliance of 13 notifications per year 
of €1528,80 (SL) €6489.60 (IR) , €2589,60( MT) and €5631,60 (FI) respectively. 

3. Estimation of the administrative costs per option  

Policy  Option  3:  Measures  to  improve  the  effectiveness  and  quality  of  the  notification 
procedure 

This option contains the following elements to be introduced into the notification obligation: 

The obligation to notify draft measures, coupled with a period of three months in which the 
Member  State  may  not  adopt  the  notified  measure,  the  notification  system  will  be  made 
transparent,  Member  State  need  to  provide  proper  proportionality  assessments  and  the 
possibility to adopt decisions will be aligned in that decisions can also be adopted in case of 
measures affecting the freedom to provide services. 

The increase in administrative costs will be limited under this option.  

The obligation to notify drafts might lead to the possibility that could result in the necessity to 
notify  again  in  case  substantial  changes  have  been  made  to  the  'original'  notification. 
However,  experience  in  this  respect  with  the  notification  obligation  under  Directive 
2015/1535 (SMTD Directive) show that only in 10 out of 700 notifications a new notification 
necessary.  

Making the system transparent is likely to result in comments from external stakeholders, but 
without an obligation to take such comments on board, in principle Member States will not be 
faced  with  additional  work.  On  the  other  hand,  transparency  might  influence  compliance 
(non-notification  might  be  detected),  however  the  administrative  costs  stemming  from  this 
falls within the costs calculated under the baseline scenario.  

A  slight  increase  might  flow  from  the  obligation  to  better  formalize  the  proportionality 
assessment and communicate the information via IMI. Although the obligation to carry out a 
proportionality  assessment  of  new  requirements  in  the  field  of  services  stems  from  the 
existing provisions of the Services Directive, the reporting as such requires work which will 
lead to a small increase in administrative cost. In terms of the baseline scenario, on average 
Member  States  indicated  to  need  2  hours  for  uploading  the  information  into  IMI.  The 
proportionality assessment might require maximum 30 minutes more. The increase of cost is 
therefore negligible. 

A positive effect, meaning a decrease in administrative costs, could result from the fact that 
Member  States  are  likely  to  be  faced  with  less  infringement  proceedings.  The  benefit  of 
notifying in the draft stage means that amendments could still be made. In addition, aligning 
the  possibility  for  the  Commission  to  issue  decisions  also  in  respect  of  measures  affecting 

71 

 
 
temporary  cross-border  provision  of  services  means  that  the  need  for  infringement 
proceedings could reduce for these measures as well. 

Option  4:  Measure  to  expand  the  scope  and  improve  coherence  of  the  current 
notification system 

This option also contains the elements of option 3. 

Extending  the  scope  of  the  notification  obligation  will  result  in  a  higher  number  of 
notifications therefore the administrative burden for Member States will increase somewhat. 
It could be assumed that the same level of baseline administrative cost per notification (i.e.  € 
385 per notification) would apply also to notifications concerning establishment. 

It is very difficult to present an estimate on how many new notifications will have to be done. 
Based  on  the  mutual  evaluation  exercise  over  the  years  2010-201165,  around  4400 
authorisation schemes and 225 multi-disciplinary requirements were detected in the Member 
States.  However  the  obligation  to  notify  only  applies  when  changes  are  made  or  new 
requirements  are  introduced  and  this  depends  very  much  on  developments  within  the 
respective Member State. 

The increase in notifications will however also lead to a reduction in terms of Member States 
being less affected by enforcement action from the Commission. 

Option 5: Additional instruments to guarantee compliance by Member States 

This  option  will  also  contain  the  elements  of  option  4  that  means  that  the  increase  in 
administrative  costs as a  result of expansion of the scope of the notification  obligation  will 
also be seen under this option. 

Under  option  5a  a  provision  stating  the  consequences  of  not  complying  with  certain 
obligations from the notification procedure will be introduced. For those Member States not 
complying with these obligations it will have an impact on their public authorities, which will 
need to better comply with the notification obligation in order to avoid the consequences on 
non-notification.  The  number  of  notifications  will  increase  and  therefore  the  administrative 
cost  for  the  public  authorities  will  increase.  However,  the  total  administrative  costs  will  be 
the  baseline  scenario  as  presented  in  table  4.  Given  that  the  average  baseline  cost  per 
notification is €385, this might result in a burden of around €500866 per Member State, taking 
the average of 13 notifications per Member State per year. It should however be underlined, 
that these administrative costs should already be borne by the Member States, given that this 
option  is  not  about  extending  the  notification  obligation  but  ensuring  compliance  with  the 
existing notification in the Services Directive.    

Also under this option, the administrative costs related to the notification obligation need to 
be  considered  together  with  an  expected  decrease  of  the  costs  on  public  administrations 
linked to processing of infringement cases which would have been taken by the Commission 
under  the  current  notification  procedure  against  unlawful  measures  being  introduced  by  a 
Member State.   

65  Communication  from  the  Commission  to  European  Parliament,  the  Council,  the  European  Economic  and 
Social Committee and the Committee of the Regions, Towards a better functioning Single Market for services – 
building  on  the  results  of  the  mutual  evaluation  process  of  the  Services  Directive,  27.1.2011,  COM(2011)  20 
final. 
66  The  negligible  increase  of  costs  (maximum  30  minutes  more  per  notification)  due  to  proportionality 
requirements  is  not  taken  into  account  in  this  calculation.  As  mentioned  under  option  4,  it  is  impossible  to 
estimate the additional costs due to extending the scope of notification obligation. 

72 

 
 
                                                 
Under  option  5b,  the  possibility  for  the  Commission  to  declare  in  its  decisions  a  national 
regulation  inapplicable,  in  case  it  was  assessed  non-compliant  with  the  Services  Directive 
during  the  notification  process,  can  expose  the  public  authorities  to  the  changes  of  the 
national  legal  framework  which  are  much  faster  than  following  a  classic  infringement 
procedure. The time for the authorities to adapt to the new legal context will be much shorter.  

Overall,  the  increase  of  administrative  burden  will  be  at  the  similar  level  as  the  increase 
established under option 4. 

9.5.  Annex 5: Evaluation report – notification procedure of the Services 

Directive 

1. Introduction 

The  purpose  of  this  evaluation  is  to  assess  the  functioning  of  the  current  notification 
procedure of Directive 2006/123/EC on services in the internal market ("Services Directive"), 
in  terms  of  effectiveness,  efficiency,  coherence,  relevance  and  EU  added  value.  Member 
States  have  an  obligation  to  notify  new  laws,  regulations  and  administrative  provisions 
affecting the freedom of establishment for providers to the Commission according to Article 
15(7). Similarly, Member States have an obligation to notify legislative changes affecting the 
freedom to provide services (i.e. temporary provision of cross-border services) according to 
Article 16 and 39(5) of the Services Directive. This evaluation assesses the processes put in 
place  by  the  Services  Directive  regarding  notification  and  does  not  aim  at  assessing 
comprehensively their contribution to or wider impacts on the Single Market.  

2. Background 

2.1 Services Directive and its notification procedure 

The objective of the Services Directive is to release the full potential of services markets in 
Europe  by removing  legal and administrative barriers to  trade. The original  proposal  of the 
Commission  in  2004  contained  a  specific  notification  obligation  only  for  requirements  in 
relation  to  the  freedom  of  establishment  (now  Article  15).  A  notification  obligation  for  the 
freedom to provide services (now covered by Article 16) was not to be necessary, due to the 
proposed 'country of origin' principle. However, during the negotiations on the proposal, this 
principle appeared too controversial and as a compromise current Article 16 was introduced 
which  does  allow  Member  States,  with  certain  limitations,  to  impose  also  requirements  in 
case  of  temporary  cross-border  provision.  The  obligation  of  Article  39(5)  to  notify  was 
introduced at the last minute as a safeguard, to introduce some form of control on Member 
States legislative action. 

The  original  proposal,  based  on  an  inventory  of  the  services  market  in  Europe,  limited  the 
notification  obligation  to  the  freedom  of  establishment  and  did  not  cover  a  possible 
notification  obligation  for  authorisations  or  multi-disciplinary  activities.  It  was  considered 
that the requirements covered by Article 15 were more suitable for a notification obligation. 

73 

 
 
 
The Directive was adopted in 2006 after very long, intensive and difficult discussion both in 
Council and the European Parliament. The Services Directive had to be implemented by all 
EU  countries  end  of  2009.  Prior  to  the  entry  into  force  of  the  Services  Directive,  the  only 
obligation to notifying service requirements concerned the obligation to notify requirements 
in  relation  to  information  society  services  based  on  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,  the  Single  Market 
Transparency Directive (now Directive 2015/1535).  

The  Services  Directive  established  that  national  rules  restricting  the  right  of  establishment 
and the freedom to provide services falling under the Directive must be non-discriminatory, 
proportionate  and  justified  by  public  interest  objectives.  To  ensure  that  all  new  legal 
requirements imposed by Member States fulfil these conditions and to prevent new barriers, 
the  Services  Directive  introduced  a  procedure  whereby  Member  States  shall  notify  to  the 
Commission  new  or  changed  legal  requirements  affecting  services.  This  should  allow  the 
Commission and other Member States to assess whether such requirements are justified and 
proportionate,  thus  preventing  the  introduction  of  new  barriers  and  contributing  to  a  more 
ambitious implementation of the Services Directive, which is the more specific objective of 
the notification procedure. Such a procedure did not exist prior to the adoption of the Services 
Directive. 

The  Directive  makes  reference  to  the  existing  obligation  to  notify  under  the  Single  Market 
Transparency  Directive  in  order  to  avoid  Member  States  having  to  notify  twice  in  case  of 
measures which cover both. 

The notification obligation regarding requirements affecting the freedom of establishment is 
different  than  the  obligation  on  requirements  affecting  the  free  movement  of  services,  as 
shown in section 2.1.1 and 2.1.2. 

2.1.1 The freedom of establishment 

Article  15  of  the  Services  Directive  regulates  the  notification  obligation  for  requirements 
affecting  the  freedom  of  establishment.  According  to  Article  15(7),  Member  States  are 
obliged  to  notify  the  Commission  any  new  laws,  regulations  or  administrative  provisions 
which  set  requirements  listed  in  Article  15(2),  together  with  the  reasons  for  those 
requirements. Within a period of 3 months from the date of the notification, the Commission 
examines  the  requirements  and  where  appropriate  could  adopt  a  Decision  requesting  the 
Member State to refrain from adopting the requirements or to abolish them.  

The  following  requirements  are  included  in  the  exhaustive  list  of  Article  15(2):  a) 
quantitative  or  territorial  restrictions,  b)  obligation  on  the  provider  to  take  a  specific  legal 
form, c) requirements which relate to the shareholding of a company, d) requirements, other 
than those covered by Directive 2005/36/EC or other Community acts, which reserve access 
to  the  service  activity  in  question,  e)  ban  on  having  more  than  one  establishment  in  the 
territory of the same State, f) requirements fixing a minimum number of employees, g) fixed 

74 

 
 
minimum and/or maximum tariffs with which the provider must comply and h) an obligation 
on the provider to supply other specific services jointly with his service.  

These requirements constitute severe obstacles to the freedom of establishment and can often 
be replaced by less restrictive means. The European Court of Justice has in many cases ruled 
such  requirements  to  be  incompatible  with  the  freedom  of  establishment.  However,  under 
certain  circumstances  and  in  specific  sectors  such  requirements  might  nevertheless  be 
justified.  As  a  result,  Article  15  does  not  provide  for  their  outright  prohibition  but  requires 
Member  States  to  assess  these  requirements  on  the  basis  of  the  criteria  in  Article  15(3), 
namely,  non-discrimination,  necessity  (i.e.  justified  by  an  overriding  reason  of  public 
interest) and proportionality, and notify the Commission about them.67 

2.1.2 The free movement of services 

The obligation to notify requirements affecting the free movement of services is covered by 
Article  16  and  39(5)  of  the  Services  Directive.  The  obligation  is  not  limited  to  a  list  of 
requirements  which  is  the  case  for  requirements  affecting  the  freedom  of  establishment;  it 
covers all requirements affecting the freedom to provide services unless it concern any of the 
services specifically mentioned in Article 17 of the Services Directive.68 According to Article 
39(5) of the Services Directive, Member States shall transmit to the Commission any changes 
in their requirements, including new requirements, as mentioned in Article 16(1) and the first 
sentence of Article 16(3), together with the reasons for them. The Commission also examines 
these  measures  within  a  period  of  3  months,  but  in  case  the  Commission  consider  such 
measures to be in conflict with EU law, it does not have the possibility to adopt a Decision, 
but  will  have  to  open  an  EU  Pilot  and  where  necessary  follow-up  with  infringement 
proceedings.       

Article 16 (1) requires Member States to respect the right of providers to provide services in a 
Member State other than that in which they are established and shall ensure free access to and 
free exercise of a service activity within its territory. However, Member States may introduce 
requirements if they are non-discriminatory, justified by public policy, public security, public 
health  or  the  protection  of  the  environment  and  proportionate.  Furthermore,  Article  16(2) 
introduces a non-exhaustive list of requirements which in principle cannot be imposed by a 

67 Handbook on the implementation of the Services Directive (2007), p. 32 
68  Article  16  shall,  according  to  Article  17,  not  apply  to  (1)  services  of  general  economic  interest  which  are 
provided  in  another  Member  State,  inter  alia:  a)  postal  services  covered  by  Directive  97/67/EC,  b)  electricity 
services  covered  by  Directive  2003/54/EC,  c)  gas  services  covered  by  Directive  2003/55/EC,  d)  water 
distribution  and  supply  services  and  waste  water  services  and    e)  treatment  of  waste,  (2)  matters  covered  by 
Directive  96/71/EC  (posting  of  workers),  (3)  matters  covered  by  Directive  95/46/EC  (data  protection).  (4) 
matters  covered  by Directive  77/249/EEC (lawyers),  (5)  the  activity of judicial recovery of  debts, (6)  matters 
covered  by  Directive  2005/36/EC  (professional  qualifications),  (7)  matters  covered  by  Regulation  (EEC)  no 
1408/71(social  security  schemes),  (8)  matters  covered  by  Directive  2004/38/EC  (administrative  formalities  of 
competent  authorities  in  Member  States  with  which  beneficiaries  must  comply),  (9)  possibilities  to  require 
VISA  or  residence  permit  for  third  country  nationals,  (10)  matters  covered  by  Regulation  (EEC)  no  259/93 
(shipment of waste) and (11) copyright, neighbouring rights and matters covered by Directive 87/54/EEC and 
Directive 96/9/EC, (12) involvement of notaries, (13) matters covered by Directive 2006/43/EC (statutory audit 
of annual accounts and consolidated accounts, (14) registration of vehicles leased in another Member State and 
(15) rules linked to private international law. 

75 

 
 
                                                 
Member  State  in  case  of  temporary  provision  of  cross-border  services.  The  examples  of 
requirements have, to a large extent, already been subject of case-law of the European Court 
of  Justice  and  have  been  found  to  be  incompatible  with  Article  56  of  the  Treaty.  On  this 
basis, there is a strong presumption that such requirements cannot be justified by one of the 
four  public  interest  objectives  (i.e.  public  policy,  public  security,  public  health  and  the 
protection  of  the  environment)  referred  to  in  Article  16(3)  since  they  will  in  general  be 
disproportionate.69  

The following requirements are included in the list of Article 16(2):   
(a) an obligation on the provider to have an establishment in their territory;  
(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  association  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 chambers, which the provider needs in order to supply the services in 
question;  
(d)  the  application  of  specific  contractual  arrangements  between  the  provider  and  the 
recipient which prevent or restrict service provision by the self-employed;  
(e)  an  obligation  on  the  provider  to  possess  an  identity  document  issued  by  its  competent 
authorities specific to the exercise of a service activity;  
(f)  requirements,  except  for  those  necessary  for  health  and safety  at  work,  which  affect  the 
use of equipment and material which are an integral part of the service provided;  
(g) restrictions on the freedom to provide the services referred to in Article 19 of the Services 
Directive. 
If  a  Member  State  introduces  requirements  according  to  Article  16(1)  and/or  16(2)  they 
should be notified in accordance with Article 39(5) of the Services Directive.  

3. Methodology 

This  evaluation  is  based  on  various  sources  of  information  such  as  the  statistics  from  the 
notifications  in  the  Internal  Market  Information  System  (hereinafter  IMI)  and  the 
Commission assessment of the notifications coming in prior to the use of IMI as of 2014 (see 
for an explanation of the system under 2.2).  

Furthermore, several discussions have taken place with Member States in the Expert Group 
on the Services Directive70, providing information on for example the way in which national 
administration are organised to fulfil the notification obligation, what type of instruments are 
in place to help such a process, how the process works in practice, why some of the Member 
States  have  never  or  only  made  a  few  notifications,  whether  Member  States  experience 
difficulties  with  the  notification  obligation  and  how  they  see  the  consequence  of  non-
notification.  

69 Handbook on the implementation of the Services Directive (2007), p.39 
70 Expert Group on the Services Directive meetings of 13 March and 16 July 2015. 

76 

 
 
                                                 
Also the Court of Auditors have examined the notification obligation as part of its assessment 
of the effective implementation of the Services Directive71.  

The public consultation on the proposal to reform the notification procedure for services ran 
from 19 February until 19 April 2016 also provided input to this analysis. It was addressed to 
both  stakeholders  and  administrations  of  the  Member  States  at  local,  regional  and  national 
level (see Annex 2 for more details).  

This  evaluation  investigates  the  functioning  of  the  notification  procedure  set  up  by  the 
Services  Directive  by  analysing  the  Commission's  five  standard  evaluation  criteria 
(effectiveness,  efficiency,  relevance,  coherence,  and  EU  added  value)  through  a  set  of 
questions answered below in section 5. 

4. Implementation – state of play 

The developments in respect of the notification process  

Period 2009-2013 
From the implementation date of the Directive end 2009 until the end of 2013, the obligation 
to notify materialised via a form to be filled in by Member States and to be sent together with 
a copy of the law, regulation or administrative provision by e-mail to a functional mailbox72 
of the Commission.  
The format of these forms have been discussed in the Expert Group on the Services Directive 
with the Member States.73 
Form A was used by the Member State for the notification of new requirements applicable to 
established providers and falling within Article 15(2) of the Services Directive. 
Form  B  was  used  for  the  notification  of  new  requirements  covered  by  Article  16  of  the 
Services Directive which Member States intend to apply to cross-border providers established 
in  other  Member  States.  This  form  allows  compliance  with  notification  obligations  under 
Article 39(5).  

Member States were requested to reply to the questions in terms of: 

  Level at which the notified requirement is imposed (national, regional, local)? 
  Date (or expected date) of entry into force 
  Specific provision/article in the act that contains the notified requirement 
  Service activity/ies to which the notified requirement applies 
  Type  of  requirement  (list  of  requirements  stemming  from  Articles  15  and  16  was 

provided). 

  Description of the notified requirement 
 
  Detailed statement of ground 

Indication of the justification(s) 

71  European  Court  of  Auditors,  Special  report  No  5/2016,  "Has  the  Commission  ensured  effective 
implementation of the Services Directive?, adopted by Chamber IV on 3 February 2016. 
72 GROW-SERVICES-NOTIFICATIONS@ec.europa.eu 
73 Expert Group on the Services Directive of 9 September 2009. 

77 

 
 
 
 
                                                 
The form also provided the possibility to indicate whether in addition to being applicable to 
cross-border providers, the notified requirements also applied to established service providers 
and fell under one of the eight categories listed in Article 15(2) of the Directive. In that case 
Member  States  could  specify  under  point  11  of  form  B.  This  would  allow  compliance,  in 
these  specific  circumstances,  with  notification  obligations  under  both  Articles  39(5)  and 
15(7) of the Services Directive, thus a separate form A will not have to be completed. 

Once received, the Commission took care of distributing the original notification via e-mail 
to all other the Member States, followed by an English translation. The system was only for 
the Commission and the Member States. External stakeholders were not involved in any of 
the states of the process. 

An overview of the number of notifications received per Member State is provided in table 1. 

Period 2014 and onwards 
Since the beginning of 2014, the notifications are no longer received via e-mail, but Member 
States and the Commission use Internal Market Information system (IMI). The change came 
due to the entry into force of the IMI regulation74, which introduced IMI for administrative 
cooperation  between  competent  authorities  of  the  Member  States  and  between  competent 
authorities  of  the  Member  States  and  the  Commission  necessary  for  the  implementation  of 
Union  acts  in  the  field  of  the  internal  market.  The  Annex  to  the  regulation  lists  the 
notification obligation of the Services Directive as a provision on administrative cooperation 
in a union act that is to be implemented by means of IMI. 

In  comparison  to  the  form  used  prior  to  IMI,  the  following  additional  information  is 
requested from the Member States: 

  Status of the act 
  Reference to the legislation on the internet 
  Whether the imposing authority is the sender of the notification 
 

Indicate  whether  it  concerns  a  requirement  effecting  establishment  only  or 
establishment and/or freedom to provide services. 

  Proportionality analysis 

The  notifying  Member  State  directly  uploads  the  notification  into  IMI.  All  other  Member 
States and the Commission are informed via an automatic e-mail about this notification. 
Member  States  and  the  Commission  are  also  informed  via  e-mail  of  any  subsequent 
document uploaded into the system (including translations). 
Also for the notifications uploaded in IMI the Commission is providing an English translation 
and, if relevant, a translation of the comments made by the Commission and/or other Member 

74  Regulation  (EU)  No  1024/2012  of  the  European  Parliament  and  of  the  Council  of  25  October  2012  on 
administrative cooperation through the Internal Market Information System and repealing Commission Decision 
2008/49/EC (‘the IMI Regulation’). 

78 

 
 
 
 
 
 
 
 
                                                 
States and the reply from the notifying Member State to comments from the Commission and 
other Member States.  
The  IMI  system  closes  the  notification  after  3  months  from  the  date  of  the  receipt  of  the 
translation.  After  closure  of  the  notification  it  is  not  possible  for  Member  States  and  the 
Commission to upload any other documentation related to the notification in the system. 
External stakeholders have no access the notification procedure running via IMI.  

An overview of the number of notifications received per MS is provided in table 1. 

Member State 
Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy  
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
Total 
Table 1 Number of notifications per Member State in the period 2010-2015. 

2011 
14 
0 
0 
NR 
2 
0 
1 
2 
0 
1 
67476 
0 
1 
0 
5 
0 
5 
0 
0 
57 
0 
0 
0 
0 
7 
1 
19 
0 
789 

2010 
1 
0 
1 
NR 
1 
0 
1 
1 
0 
0 
52 
0 
4 
0 
6 
1 
0 
0 
0 
64 
0 
0 
0 
0 
0 
0 
6 
1 
139 

2013 
6 
0 
3 
0 
0 
12 
0 
0 
0 
15 
0 
0 
11 
0 
4 
3 
0 
0 
0 
21 
0 
0 
0 
0 
0 
0 
19 
0 
94 

2012 
11 
2 
1 
NR 
4 
0 
2 
0 
0 
10 
0 
0 
7 
0 
6 
0 
23 
3 
0 
16 
0 
1 
1 
0 
1 
1 
15 
1 
105 

2014 
7 
19 
2 
61 
6 
0 
6 
1 
0 
13 
5 
0 
22 
0 
1 
12 
1 
1 
0 
5 
0 
0 
1 
0 
3 
8 
48 
3 
225 

2015 
1 
5 
0 
0 
2 
14375 
2 
0 
0 
13 
12 
0 
14 
0 
4 
2 
0 
0 
0 
51 
1 
6 
0 
0 
0 
0 
29 
2 
287 

Total 
40 
26 
7 
61 
15 
155 
12 
4 
0 
52 
743 
0 
59 
0 
26 
18 
29 
4 
0 
21477 
1 
7 
2 
0 
11 
10 
136 
7 
1639 

75  127  notifications  on  the  same  issue:  a  prohibition  of  door-to-door  sales  of  goods  and  services,  notified  by 
different municipalities. 
76 620 notifications on either funeral services or cleaning services, notified by different municipalities. 
77  Some  notifications  concern  the  'General  Municipal Ordinance'  or  'Building Ordinance'  notified  by  different 
municipalities. 

79 

 
 
 
 
 
 
 
 
                                                 
Results of the changes in use of system 
As to the general amount of notifications received, no difference can be noted in respect of 
the change in the system used, going from forms being sent by e-mail to the use of IMI. 
The  statistics  due  show  that  IMI  facilitates  commenting,  because  after  analysing  all  the 
notifications the Commission notes a substantial increase in the comments made both by the 
Member  States  and  the  Commission.  Prior  to  IMI,  the  Commission  only  made  one  written 
comment  and  other  Member  States  made  only  two  (period  2010-2013)  whereas  since  the 
introduction of the notification into IMI, the Commission has issued forty written comments 
and other Member States twenty-seven (years 2014-2015). 

2.3 Practical arrangements of the notification obligation in the Member States 

The notification obligation laid down in Article 15(7) and 39(5) as such does not have to be 
transposed in the respective Member States, due to the fact that the obligation is directed at 
them and does not create any additional right to others. That being said, Member States have 
made  different  arrangements  within  their  government  structures  to  fulfil  the  obligation  to 
notify.  Several  Member  States  have  appointed  a  central  (contact)  point  within  their 
government structure being responsible for the notifications or to function as a sort of check 
within the process (for example DK, HR, FR, IT, CY, LT, PT, SI, SK and SE). Only three of 
these Member States (DK, SE and SI) have decided to use the already existing contact point 
under  the  Single  Market  Transparency  Directive  1998/34  (now  Directive  2015/1535),  the 
contact points of which are responsible for the obligation to notify regulations in the area of 
goods and information society services.  
Other  Member  States  have  appointed  several  bodies/authorities  being  responsible  for  the 
notifications under the Services Directive (for example NL, MT, PL, RO, UK).  

In the group of Member States with over 10 notifications in consecutive years most Member 
States have organised the notification obligation via a central contact point.   

2.4 Treatment of the notification by the Commission 

All  notifications  received  are  assessed  by  the  Commission  on  their  compatibility  with  EU 
law.  In  this  respect  no  distinction  is  made  between  notification  covered  by  the  freedom  of 
establishment or whether it concerns a notification related to the freedom to provide services.  
In  case  the  Commission  has  concerns  in  respect  of  the  compatibility  with  EU  law  or  has 
questions on the notification as such, it will upload comments and/or questions in IMI. Such 
comments are also visible for the other Member States. The Commission works with the aim 
to  assess  the  notification  within  one  month  after  the  date  of  the  notification.  In  case  of 
comments they should ideally be uploaded within two months of the date of the notification 
in order to give the notifying Member State enough time to respond. 

According  to  the  second  paragraph  of  Article  15(7)  for  the  freedom  of  establishment,  the 
Commission, after the obligatory examination of the compatibility of any new requirements 
with  Community  law,  where  appropriate,  is  entitled  to  adopt  a  Decision  requesting  the 

80 

 
 
 
 
 
 
 
 
Member  State  in  question  to  refrain  from  adopting  them  or  to  abolish  them  if  already 
adopted. 
Such  an  instrument  is  not  available  in  respect  of  the  measures  regarding  the  freedom  to 
provide  services  in  Article  16.  The  notification  obligation  for  these  requirements  in  Article 
39(5) remains silent on such an instrument. For these requirements the only possible action 
would be enforcement action. 

5. Answers to the evaluation questions 

5.1. Effectiveness 

- To what extent have the objectives been achieved? 
- What have been the (quantitative and qualitative) effects of the intervention? 
- What factors influenced the achievements? 

a) Achieved objectives and effects of the intervention 

The  objective  of  the  notification  procedure  in  Article  15(7)  and  39(5)  of  the  Services 
Directive is to improve the functioning of the Single Market for services by making sure that 
all new legal requirements imposed by Member States are non-discriminatory, proportionate 
and justified by public interest objectives and to prevent new barriers on the Single Market 
for services to be introduced. The notification obligation should allow both the Commission 
and  Member  States  to  assess  whether  the  notified  requirements  fulfil  the  conditions  of  the 
Services Directive.  

The Commission received a total of 1639 notifications since the implementation date of the 
Services Directive end 2009 until the end of 2015. Five Member States (FI, IE, EL, MT and 
SL) have never notified any requirements affecting the freedom to provide services and the 
freedom  of  establishment  introduced  after  28  December  2009.  A  considerable  group  of 
Member States (PL (1), RO (2), EE (4), LU (4), BG (7), PT (7) and UK (7)) have very few 
notifications.  
During several meetings of the Expert Group of the Services Directive the Commission made 
detailed overview of the compliance of the Member States. Statistics per Member States were 
presented  showing  the  amount  of  notifications78.  The  Commission  also  asked  specifically 
those Member states with no or a limited amount of notifications to explain in a meeting of 
the Expert group to address the reasons behind the low number of notifications79. 
The report of the Court of Auditors refers to the lack of compliance by some of the Member 
States80.  
This  is  in  contrast  to  those  Member  States  with  over  ten  notifications  in  consecutive  years 
(HU,  NL  and  SE).  Until  now,  no  convincing  argument  has  been  given  by  those  Member 

78 Expert group on the Services Directive meetings of 23 April 2013, 25 March 2014 and 25 January 2016. 
79 Expert group on the Services Directive meeting of 13 March 2015. 
80  Paragraph  61  of  the  European  Court of  Auditors,  Special  report  No  5/2016,  "Has  the  Commission  ensured 
effective implementation of the Services Directive?, adopted by Chamber IV on 3 February 2016. 

81 

 
 
 
 
 
 
 
                                                 
States  with  a  low  amount  of  notifications  or  no  notification  at  all.  It  is  clear  that  different 
degrees of regulatory intensity cannot be the reason behind this lack given that some of the 
top-notifying Member States (SE, NL) are countries with highly liberalised services markets. 
The question has been addressed to Member States during a meeting of the Expert Group on 
the  Services  Directive81,  but  none  of  these  Member  States  have  been  able  to  explain  the 
differences between them and the other Member States. What could be behind the absence of 
notifications is the lack of awareness of the existence of the notification obligation especially 
at  local  and  regional  level  in  the  administration  and  the  lack  of  consequences.  As  will  be 
further  explained  under  part  b2  (Factors  impeding  the  effectiveness  of  the  notification 
procedure),  the  absence  of  a  clear  legal  consequence  when  the  requirement  has  not  been 
notified does not help the fulfilment of the notification obligation. 

In  several  ongoing  enforcement  cases  the  Commission  became  aware  of  the  fact  that  the 
requirements  at  stake  in  the  particular  case  being  in  conflict  with  the  obligations  of  the 
Services Directive had also not been notified despite the obligation in the Services Directive. 
In such cases, the Commission has added the failure to notify as a separate ground for action. 

From 2009 to 2015 the Commission had to initiate 30 EU Pilot cases82 (based on complaints, 
own-initiative  from  the  Commission  or  notifications)  against  Member  States  concerning 
regulatory measures covered by the Services Directive they newly introduced and which the 
Commission  suspected  not  to  be  compatible  with  EU  law.  This  represents  27%  of  all  EU 
Pilot cases initiated by the Commission over this period related to the Services Directive. The 
amount  of  cases  based  on  newly  introduced  regulatory  measures  is  rising,  representing  in 
2015 40% of all EU Pilot cases related to the Services Directive.  
The Commission has undertaken several studies on the effect of the Services Directive on the 
Single Market and its potential in terms of economic growth. Given the indirect effect on the 
Single Market the notification procedure has in this respect (it effects the requirement being 
subject  of  the  notification)  it  is  difficult  to  establish  the  exact  part  of  the  growth  potential 
which could be attributed to the notification procedure. 

b) Factors influencing the functioning of the notification procedure 

Several factors influence the effectiveness of the notification procedure. 

b1) Factors improving the effectiveness of the notification procedure 

Organisation and actions at Member States' level 

81 Expert group on the Services Directive on 13 March 2015. 
82 EU Pilot is a Commission initiative aimed at asking Member States to answer questions and to find solutions 
to problems concerning the application of Union law. It is supported by an online database and communication 
tool. Through the dialogue in EU Pilot, the Commission and Member States solve problems more quickly and 
compliance with Union law obligations is achieved to the benefit of the public and businesses. 

82 

 
 
 
 
 
 
 
 
 
                                                 
The  transposition  of  Article  15(7)  and  39(5)  of  the  Services  Directive  required  Member 
States to organise at national level the responsibility to notify in order to fulfil the obligations 
of  the  Services  Directive.  Following  questions  asked  in  the  Expert  Group  on  the  Services 
Directive, it is clear that Member States have chosen different ways in how to take care of the 
notification obligation. Member  States  have  appointed  a  central  (contact)  point  within  their 
government  structure  being  responsible  for  the  notifications  or  to  function  as  some  sort  of 
check within the process by using existing structures or designate a particular ministry to be 
responsible for the job.  
Other  Member  States  have  appointed  several  bodies/authorities  being  responsible  for  the 
actual  notification.  Commission  analysis  shows  a  positive  correlation  between  the 
establishment of one central contact point and the number of notifications transmitted. That 
said,  the  Netherlands  has  decided  to  have  the  responsibility  to  notify  placed  upon  all 
Ministries, provinces and municipalities and is among the top notifying Member States. 
Depending on the way in which it is organised, one or more staff members will take care of 
the  actual  notification,  but  it  will  be  the  authority  in  the  Member  State  responsible  for  the 
proposed measure to indicate the notification obligation. 
Examples of good practices: 

Hungary:  The  Ministry  of  Justice  is  responsible  for  the  Services  Directive  and,  more 
specifically,  the  notification  obligation.  The  Ministry  has  set  up  a  "Services  Notification 
Center"  which  is  also  the  national  IMI-coordinator.  In  addition,  there  is  one  Services 
Directive "Contact Point" in every Ministry which is registered in IMI. One of the main tasks 
of  the  Center  is  to  assess  and  approve  notifications/draft  legislation  prepared  by  other 
Ministries. The Ministry responsible for the draft legislation will then upload the notification 
in IMI and the IMI coordinator (Ministry of Justice) approve and forward the notification to 
the  Commission.  The  Services  Notification  Center  receives  all  notifications  from  other 
Member States and distributes them to the relevant Ministries. The Ministries are encouraged 
to follow the notifications and learn from other Member States. 

Sweden: The Ministry for Foreign Affairs has the overall responsibility for notifications on 
services based on laws and regulations issued by the Government, and notifications according 
to  the  Transparency  Directive.  It  has  a  coordinating  role  and  an  obligation  to  inform  and 
advice the other Ministries about the notification obligation under the Services Directive and 
the  Transparency  Directive.  All  other  Ministries  have  an  obligation  to  consult  the  Ministry 
for Foreign Affairs if legal proposals may have an impact on the Single Market to ensure that 
new  or  changed  provisions  are  in  compliance  with  EU  law  and  that  Sweden  fulfils  the 
notification obligations. Once the notifications have been finalised; the Ministry for Foreign 
Affairs send the notifications to one of its authorities – the National Board of Trade – which 
is responsible for uploading the notifications in IMI and TRIS. The National Board of Trade 
is responsible to inform and advice other authorities and municipalities about the notifications 
obligation  under  the  Services  Directive.  In  addition,  the  authority  is  responsible  to  submit 
notifications according to the Services Directive and the Transparency Directive in IMI and 
TRIS. 

83 

 
 
 
 
 
Further to the structure chosen, Member States have introduced different means to guide the 
fulfilment of the notification obligation. Such additional instruments range from flow charts, 
counselling, annual meetings, circulars, trainings, workshops, step-by-step guidance, website 
and a toolkit. Given the various instruments on offer to guide the notification obligation and 
with all Member States having introduced such additional means, no specific conclusion can 
be  drawn  as  to  whether  a  particular  instrument  works  better  than  another  one.  The 
Commission  does  have  the  impression  that  if  Member  States  have  opted  for  a  range  of 
instruments overall a higher number of notifications can be detected. Member States which 
have only limited instruments in place are among the Member States with no or with a small 
amount of notifications (for example MT, PL, UK, RO, PT).      
The use of IMI 
The use  of IMI  for the notification obligation under the Services  Directive is  working very 
well  and  considered  a  useful  communication  vehicle  for  the  obligatory  notifications.  Both 
Member States and the Commission appreciate the quick adaptations of IMI to the particular 
needs  of  the  users  and  to  the technical  developments.  Overall  it  is  considered  to  be  a  user-
friendly tool.  
Although no increase in the amount of notifications has been detected since the use of IMI, 
what could be established is that more comments have been made by Member States and the 
Commission. Overall the administrative procedure has been improved due to the use of IMI.    

b2) Factors impeding the effectiveness of the notification procedure 

On  the  basis  of  Commission  assessments  of  the  statistics  of  the  existing  notification 
procedure, feedback from Member States notifying national regulations under this procedure 
and the public consultation, the following additional issues have been identified as impeding 
the effectiveness of the notification procedure: 

Possibilities for Member States, the Commission and stakeholders to intervene in a proactive 
manner prior to a national regulation being adopted are limited 

There  is  no  obligation  for  Member  States  to  notify  regulations  in  draft  form83.  In  practice, 
from the 1639 notifications received via the Internal Market Information system and via the 
functional mail box during the entry into force of the Services Directive and the end of 2015, 
1426 referred to final regulation (which could mean they had already been adopted) and 213 
to draft regulation (which means either not yet adopted or not yet into force). Furthermore, 
the  notification  obligation  in  the  Services  Directive  does  not  prevent  Member  States  from 
adopting notified legal requirements. On the contrary, Article 15(7) even states that the '[…] 
notification shall not prevent Member States from adopting the provision in question.' 

As a result, in  most  cases  the possibilities for the  Commission  and other Member States to 
intervene are limited to enforcement action (EU Pilot, infringement proceedings). Notifying 

83 The only Member State with the obligation in national legislation is Hungary. That being said, also Member 
States without the specific obligation in the law notify draft measures.  

84 

 
 
 
 
 
 
 
                                                 
Member  States  are  not  obliged  to  take  comments  which  the  Commission  or  other  Member 
States issue in response to a notification into account. In case the notified measures is not in 
conformity with EU law, the Commission will have to initiate legal proceedings or, where the 
notified  legal  requirements  concerns  establishment,  it  could  adopt  a  formal  Decision 
requesting the Member State in question to refrain from adopting the requirement or abolish 
it.  
The  results  of  the  public  consultation  show  wide  support  (69%)  for  improvements  of  the 
current system with EU action, more specifically through obligation to notify draft legislation 
and the introduction of a clear timeframe to ensure that all stakeholders can react to the draft 
law.  

The  notification  procedure  for  goods  and  information  society  services  under  Directive 
2015/1535/EC  (former  Directive  98/34.)  contains  the  obligation  to  notify  draft  legislation. 
This system is also transparent, in that external stakeholders, such as business and NGO's can 
access the notifications. 
The result of these features is that for instance in 2014, the Commission issued 62 detailed 
opinions  on  draft  measures  notified  whereas  in  the  end  it  opened  only  one  infringement 
proceeding  against  a  Member  State  because  of  national  technical  regulations  adopted  in 
breach of the provisions of Directive 98/34/EC (now Directive 2015/1535/EC). This seems to 
suggest that if Member States still have time to modify their legislation following comments 
from the Commission and the Member States expressed in detailed opinions, afterwards only 
limited enforcement action is needed to address the infringement of EU law. 

Notifications  are  not  transparent  to  stakeholders  and  the  business  community  at  large.  The 
current  system  used  for  the  notifications,  IMI,  does  not  grant  third  parties  access  to  the 
contents of the notifications (contents of national rules, any explanation by a Member State). 
The outcome of the public consultation showed that 70% of the respondent considered this a 
shortcoming.  Furthermore,  in  its  Conclusions  on  Single  Market  Policy,  the  Council  of  the 
European  Union  called  upon  the  Commission  and  Member  States  to  make  notifications 
public and transparent for all the stakeholders as is the case for goods. 
During the discussions on the use of an online tool in 2011 the transparency issue has been 
subject to a consultation among the experts of the Member States attending the expert group 
on  the  Services  Directive84.  Based  on  the  results,  12  Member  States  where  in  favour  of 
making the notifications public and 11 against (remaining Member States did not reply to the 
consultation), the decision was taken not to make notifications available to the public.  

84 E-mail sent to the members of the Expert Group on the Services Directive on 8/7/2011 containing a document 
on the transparency issue with the following questions: 
Do  you  agree  that  comments  made  by  another  Member  State  or  the  Commission  in  respect  of 
1. 
notifications sent by your Member State be made available to all the other Member States and the Commission? 
2. 
Do  you  agree  that  the  Commission  informs  the  other  Member  States  about  the  start  of  formal 
infringement  proceedings  (such  as  opening  of  an  EU  Pilot  case)  against  your  Member  State  pursuant  a 
notification? 
3. 
notifications sent by your Member State be made public? 
4.Do you agree to make the notifications sent by your Member State available to the public? 

Do  you  agree  that  comments  made  by  another  Member  State  or  by  the  Commission  in  respect  of 

85 

 
 
 
 
                                                 
Therefore, service providers do not have the possibility to be informed via notifications from 
other  Member  States  of  draft  requirements  and  to  comment  on  them.  They  risk  being 
confronted with new regulation "on the ground". 
In  contrast,  the  system  under  the  Transparency  Directive  is  transparent,  in  that  external 
stakeholders,  such  as  business  and  NGO's  can  access  the  notifications.  In  2014,  217.242 
searches  in  the  Technical  Regulations  Information  System  database  (TRIS)85  used  to 
implement the  Single Market Transparency  Directive were noted and the subscribers  to the 
mailing  list  nearly  reached  5000.  On  a  yearly  basis  between  300  and  400  comments  from 
stakeholders on the notifications are received. This shows a considerable interest from those 
outside the procedure as such in the notifications.   

The limited possibilities for the Commission, Member States and stakeholders to intervene on 
the  introduction  of  requirements  which  might  not  be  in  conformity  with  the  Services 
Directive affects the effectiveness of the notification obligation. It is currently not fulfilling 
its roles as initially intended by the legislators in that is an effective control mechanism which 
prevents  the  adoption  of  disproportionate  requirements.  This  becomes  more  apparent  in 
comparison with Directive 2015/1535, where certain features, such as the obligation to notify 
draft regulation, result in a more upfront control of regulations. 

Incoherent and inadequate Decision powers 

The Commission shall in respect  of requirements concerning the  freedom of  establishment, 
within  a  period  of  3  months  from  the  date  of  receipt  of  the  notification  examine  the 
compatibility of any new requirements with Community law. In case the Commission comes 
to the decision that the notified requirement affects the freedom of establishment and is not in 
line  with  the  requirements  of  the  Services  Directive,  it  may  on  the  basis  of  Article  15(7) 
adopt  a  Decision  requesting  the  Member  State  in  question  to  refrain  from  adopting  the 
notified  requirements  or  to  abolish  them.  The  Decision  is  to  be  interpreted  as  a  Decision 
referred to in Article 288 TFEU: "A decision shall be binding in its entirety. A decision which 
specifies to whom it is addressed shall be binding only on them." 

The  Commission  has  until  today  not  made  use  of  this  possibility,  because  the  period  of  3 
months counting from the receipt of the notification to the adoption of a Decision is too short 
for  the  Commission  to  hold  a  meaningful  dialogue  with  the  respective  Member  States, 
something  that  is  essential  before  proceeding  to  prepare  the  adoption  of  a  Commission 
Decision.  The  Commission  needs  in  general  approximately  one  month  to  assess  the 
requirement  notified  on  its  compatibility  with  EU  law  and  the  Member  State  needs  to  be 
given at least one month to be able to examine the Commission's assessment and react to it, 
with  further  discussions  to  follow  prior  to  the  Commission  being  in  a  position  to  adopt  a 
legally binding Decision. 

85 The Technical Regulation Information System contains all the notified technical regulations. Interested parties 
(stakeholders) can search in this database for the notifications under Directive 2015/1535. 

86 

 
 
 
 
 
 
 
                                                 
In  respect  of  the  requirements  affecting  the  freedom  to  provide  services,  Articles  16  and 
39(5) do not contain a similar possibility for the Commission to adopt a Decision in which it 
requests the Member State from refraining to adopt or abolish the requirement it notified. As 
has been explained under 2.1, no notification obligation was foreseen for the requirements of 
Article 16, which resulted in a last moment action to insert a notification obligation for cross-
border service provision in Article 39(5). At that moment no in-depth reflection took place as 
to align it with obligation already present in Article 15(7). 
The  only  possible  way  for  the  Commission  to  intervene  in  case  of  incompatibilities  with 
Community  law  is  to  start  an  enforcement  action  (EU  PILOT  and/or  infringement 
proceedings). 

The  statistics  of  the  total  notifications  done  by  the  Member  States  show  that  226  of  the 
notifications concern establishment whereas 1413 concern temporary cross-border services or 
both  temporary  cross-border  services  and  establishment  cases.  At  least  86%  of  the  total 
amount  of  notifications received  concern requirements  which  affect  temporary  cross-border 
provision  of  services,  where  the  possibility  to  issue  a  Decision  is  not  available.  An  EU 
PILOT or infringement proceedings is the only way to address the possible infringement of 
the Services Directive. 

The  applicable  timeline  for  the  Commission  to  adopt  a  Decision  and  the  fact  that  the 
Commission  can  only  issue  a  Decision  in  respect  of  requirements  affecting  the  right  of 
establishment  constitutes  a  third  set  of  factors  limiting  the  effectiveness  of  the  existing 
notification procedure.  

Lack of thorough proportionality assessments 

The  Services  Directive  requires  that  rules  affecting  services  are  non-discriminatory, 
necessary and proportionate. In order to determine whether a requirement is proportionate it 
is  necessary  to  take  into  account  less  restrictive  alternatives.  In  addition,  the  assessment  of 
proportionality  requires  that  due  consideration  is  taken  of  the  global  environment  in  which 
the service activity takes place. If other mechanisms and safeguards are in place which seek 
to  meet  the  same  public  interest  objectives,  these  should  be  taken  into  account  when 
determining the need for requirements and if so the restrictiveness of those requirements. 
Article 15 of the Services Directive requires the fulfilment of the proportionality test for those 
measures affecting the freedom of establishment and Article 16 and 39(5) does the same for 
requirements affecting the freedom to provide services. 

It should be stressed that the current notification procedure does not contain a clear obligation 
to  provide  a  detailed  proportionality  assessment;  neither  does  it  provide  specific  criteria  to 
conduct such an analysis. The obligation to assess the proportionality of the measure stems 
from Articles 15 and 16 as such. Member States have to, as part of the notification procedure, 
indicate whether the measure is proportionate. For this, IMI contains a specific field (called 
'proportionality assessment') and it is necessary to complete all the fields in order to finalise a 
notification. 

87 

 
 
 
 
 
 
 
The obligation to complete the 'proportionality assessment' field in IMI does not necessarily 
lead to good quality proportionality assessments, given that a single phrase suffices to fulfil 
the  obligation  in  IMI.  Therefore  the  quality  among  the  Member  States  and  per  notification 
differs  considerably.  In  approximately  50%  of  the  notifications  the  proportionality 
assessment is lacking due to the fact that the information provided does often not go beyond 
the standard phrase that the measure is proportionate since the requirements are suitable for 
achieving the desired objective and do not impose excessive restrictions.  

On the basis of newly introduced requirements by the Member States, where the Commission 
questions the proportionality, the Commission doubts whether the application of the principle 
is done correctly by the Member States (examples: territorial restrictions on driving schools, 
requirements  on  number  of  employees  and  the  place  where  the  activity  takes  place  for 
internet  travel  agencies  and  requirements  to  be  registered  in  the  trade  register  by  means  of 
establishment  or  a  legal  representative).  Some  of  these  requirements  have  been  notified  in 
which case the Commission has expressed its doubts about the proportionality element of the 
notification via comments it has sent in IMI. In case the requirement has not been notified, 
the  matter  is  subject  of  enforcement  proceedings.  Furthermore  the  Council  has  called 
specifically for Commission guidance on proportionality86.  

In  addition  to  a  considerable  amount  of  Court  jurisprudence  on  proportionality,  the 
Commission  has  used  meetings  of  the  Expert  Group  of  the  Services  Directive87  to  discuss 
individual notifications with a focus on proportionality, in order to help the Member States to 
make such an assessment in individual cases. Notifications to be discussed where selected on 
the basis of examples of good or bad proportionality assessments. The continuous call from 
the  Council  for  guidance  on  proportionality  shows  that  Member  States  consider  these 
discussions not enough. However, given that the proportionality assessment needs to be done 
on a case by case basis providing general guidance is very difficult88.  

The  effectiveness  of  the  notification  procedure  suffers  from  the  difficulties  Member  States 
seem to have to make a proper proportionality assessment and the absence of the obligation 
for Member States to provide detailed information on the proportionality assessment as such, 
due to the fact that based on what is provided now, it is very difficult to examine the different 
elements taken into account by the respective Member States.  

Legal effect of non-compliance with the notification obligation is not clear  

86 See for example, Competitiveness Council conclusions adopted 2-3 December 2013 and conclusions adopted 
2 March 2015. 
87 Expert group on the Services Directive meetings of 25 March 2014, 21 November 2014, 13 March 2015, 16 
July 2015 and 25 January 2016. 
88  Specific  guidance  is  foreseen  in  the  announced  Communication  on  the  collaborative  economy  and  an 
analytical framework on proportionality is under development for professional qualifications. 

88 

 
 
 
 
 
 
 
 
                                                 
The statistics reported on at the beginning of this section show that some Member States have 
never  notified  and  some  have  only  a  few  notifications.  Although  it  is  impossible  for  the 
Commission to estimate how many more notifications it should have received, it is clear that 
if several Member States notify the implementation of an EU directive in a given field with 
consequences  under  Articles  15  and/or  16  of  the  Services  Directive,  it  raises  the  legitimate 
question why other Member States do not consider this implementation to have an effect on 
the  requirements  of  Articles  15  and/or  16  of  the  Services  Directive,  because  they  do  not 
notify the measures they have implemented. 

Under  the  existing  rules,  the  legal  consequences  of  a  failure  to  notify  are  unclear.  The 
Services  Directive  remains  silent  as  to  what  the  possible  consequence  could  be.  Directive 
2015/1535 does not contain a special provision in terms of possible legal consequences of a 
measure not being notified either. However, the Court of Justice in its ruling in case C-194/94 
concluded that a national provision which is not notified under the Directive while it should 
have been can be declared inapplicable to individuals by national courts. This could also be 
the case when a Member State adopts a regulation in breach of the obligation to respect the 
standstill  period  (C443/98).  The  Court's  ruling  took  into  account  the  particular  features  of 
Directive 1998/34 (predecessor of Directive 2015/1535), namely the obligation to notify draft 
legislation  and  the  presence  of  a  standstill  clause  which  does  not  allow  a  Member  State  to 
adopt the measure during the notification process.  

The Commission can, as part of an EU PILOT or infringement proceedings, add the fact that 
the notification obligation has not been fulfilled as a separate ground in the proceedings, but 
there  exist  until  now  no  case  law  of  the  Court  of  Justice  explaining  what  the  legal 
consequence could be. As a result of the absence of clear legal consequences of not-notifying, 
Member States compliance with the notification obligation raises questions.   

that  effectively  prevents 

Conclusion 
The  objective  of  the  notification  obligation  of  the  Services  Directive  has  not  been 
reached because it currently does not fulfil its role as initially intended by the legislators 
of  a  mechanism 
the  adoption  of  unjustified  and 
disproportionate  requirements  that  are  not  in  compliance  with  the  Services  Directive. 
The  effectiveness  of  the  notification  procedure  is  limited  by  a  number  of  elements 
described in this section, hampering the objective of the Services Directive to establish 
more competitive and integrated services markets. Not all Member States comply with 
the  notification  obligation,  in  particular  due  to  the  absence  of  clear  consequences  of 
non-compliance. 
Other factors impeding the  optimum functioning of  the notification procedure are  the 
lack  of  transparency,  which  results  in  limited  influence  of  external  stakeholders. 
Especially  compared  to  the  Single  Market  Transparency  Directive  where  on  average 
300-400  comments  from  external  stakeholders  are  received  on  a  yearly  basis, 
transparency  is  completely  lacking  in  the  notification  obligation  of  the  Services 
Directive. 

89 

 
 
 
 
 
Most notifications concern already adopted measures, limiting severely the effectiveness 
of  the  notification  procedure.  Enforcement  action  is  very  often  the  only  follow-up 
available for the Commission to intervene.  
Trying to achieve compliance via detailed presentations on Member States performance 
in respect of compliance with the notification obligation or detailed discussions in 
respect of proportionality in the Expert Group of the Services Directive has not led to 
the desired results. 

5.2. Efficiency  

- To what extent are the costs involved justified, given the changes/effects which have been 
achieved? 
-To what extent has the intervention been cost effective? 
- If there are significant differences in costs (or benefits) between Member States, what is 
causing them? 

The  Commission  has  requested  during  a  meeting  of  the  Expert  Group  on  the  Services 
Directive information from the Member States in terms of time spent per notification and the 
cost  attached  to  this  (FTE)89.  Unfortunately,  Member  States  were  unable  to  provide  such 
information due to the fact that the task to notify is part of officials' total work package and 
therefore difficult to separate in terms of time spent. 

A more recent call for information in respect of the administrative costs to several Member 
States90  provided  information  in  terms  of  the  hours  spend  per  notification  and  the  level  of 
official occupied with the notifications. On average 12 working hours are needed in order to 
comply with the notification obligation as such (procession the notification and uploading the 
information into IMI, details on these calculations are presented in Annex 4 Evidence overvie 
attached to the Impact Assessment). This entails the necessary coordination in relation to the 
data content and the content of the documents to be uploaded, meeting the experts in charge 
of  the  legislation  in  the  course  of  fulfilling  the  notification  obligation,  uploading  the 
documents with a prior check of uploaded data before approval and informing the competent 
authority on the fulfilment of notification and updating registry on notifications. 

In case comments are received from other Member States or the Commission an additional 8 
working  hours  are  necessary  in  terms  of  analysing  its  content  in  order  to  determine  the 
competent  national  authority,  forwarding  it  to  competent  authority,  coordination  of  the 
content  of  the  answer  to  the  comments,  uploading  the  documentation,  informing  the 
competent authority and updating registry on notifications.  

89 Expert group on Services directive meeting of 16 July 2015. 
90 Sweden, United Kingdom, Portugal, Netherlands, Hungary, Poland and Germany. 

90 

 
 
 
                                                 
Notifications are in general dealt with by university-trained administrators, which leads with 
an  average  labour  cost  of  €  32,1  per  hour91,  to  an  administrative  burden  of  €  385,20  per 
notification. 

The  benefits  for  Member  States  of  the  notification  procedure  are  two-fold.  Indirectly  it 
intends  to  prevent  the  introduction  of  measures  which  are  incompatible  with  the  Services 
Directive.  This  should  lead  to  the  creation  of  a  Single  Market  for  services.  Such  a  Single 
Market would be beneficial for all Member States in that it offers their service providers the 
opportunity to go cross-border and it benefits consumers with more choice in terms of service 
providers. 

More  directly,  a  notification  procedure  could  prevent  lengthy  infringement  proceedings 
between the Commission and the Member States. In the latest version of the Single Market 
Scoreboard 10/2015, the average duration of infringement proceedings was 29.1 months.  

The introduction  of the use  of the Internal Market Information  system (IMI) led to a better 
overview of the notifications for both the Member States and the Commission, which resulted 
in  an  increase  of  comments  made.  Although  the  Commission  still  needs  to  translate  the 
incoming  notifications,  its  workload  has  been  reduced  because  it  is  no  longer  necessary  to 
send the notifications via e-mail. Member States are now informed automatically about new 
notifications and when documentation is uploaded. 

Overall  the  perception  of  Member  States  and  the  Commission  is  that  IMI  facilitates  the 
communication of the notification process. Member States are overall satisfied with the use 
of IMI. The use of the system is a subject of ongoing discussions with the Member States to 
improve the system. 

It has been established in section 3 that the notification procedure is not effective; the 
objectives  have  not  been  fully  reached  and  despite  efforts  undertaken  during  expert 
group  meetings  to  particularly  address  the  notification  obligation  (statistics  and 
individual  notifications).  Therefore,  no  matter  how  Member  States  have  chosen  to 
organise  their  fulfilment  of  the  notification  obligation,  assessing  the  efficiency  is 
difficult. Member States perception tends towards the fact that administrative burden is 
agreeable and thus, in its present form, the costs, taking the benefits of the notification 
procedure  as  such  into  consideration,  are  acceptable.  The  administrative  burden  does 
not seem to be the factor which prevents Member States from notifying.  

5.3. Relevance 

-To what extent is the notification procedure in Articles 15(7) and 39(5) still relevant? 
-How well do the original objectives still correspond to the needs within the EU? 

The objective of the introduction of the notification obligation in the Services Directive was 
to  prevent  Member  States  from  imposing  new  legal  requirements  which  are  non-

91 2006 Mean Hourly Earnings By Main Economic Activity And Occupation*  + adjustment to 2010 Prices + 
Non wage Labour Costs + 25% Overhead ESTAT: Structure of Earnings Survey - NACE rev 1.1: C to O not L. 

91 

 
 
                                                 
discriminatory,  proportionate  and  justified  by  public  interest  objectives.  Such  requirements 
could hamper the functioning of the services single market. A well-functioning Single Market 
could  lead  to  economic  growth  and  job  creation  in  the  services  sector,  which  will  benefit 
Member States' economies. This objective still remains valid. 

It is important for external stakeholders, being business organisations and individual services 
providers across the Single Market to be aware of the requirements Member States intend to 
introduce,  regardless  of  whether  they  are  compatible  with  the  Services  Directive.  Services 
providers  need  to  be  aware  of  obligations  they  face  when  seeking  to  do  business  across 
borders.  In  that  respect  it  is  important  to  know  the  full  extent  of  the  requirements  to  be 
fulfilled in order to be able to make the proper assessment whether to do business in another 
Member  State  and  what  form  is  best  to  be  chosen.  Business  organisations  need  such 
information to be able to properly inform their members and provide the correct guidance. 

70%  of  the  respondents  to  the  public  consultation  and  80%  of  the  business  community 
consider  increased  transparency  of  the  notification  procedure  vis-à-vis  of  non-institutional 
stakeholders very important. 

In  addition new  business  models  are  emerging,  which  until  now  have  seen  a  very different 
legal reaction from the Member States. The collaborative economy initiatives in the areas of 
transport  and  tourism  are  forbidden  or  limited  in  some  Member  States,  whereas  in  other 
Member  States  they  are  accepted  and  considered  to  be  covered  by  the  existing  legal 
framework (with varying degrees). Developments in the area of energy-supplies, in particular 
in relation to authorisation schemes in place in various Member States are relevant in respect 
of  the  Services  Directive.  These  examples  show  that  the  Single  Market  for  services  is 
constantly  developing  and  developments  are  not  the  same  in  all  Member  States.  This  will 
have  a  negative  effect  on  the  overall  functioning  of  the  Single  Market  for  services  which 
shows the need for monitoring from the Commission, Member States and stakeholders. 

The  need  to  have  a  notification  obligation  for  the  services  sectors  remains  highly 
relevant,  given  that  the  necessity  to  ensure  the  application  of  the  Services  Directive  is 
still  relevant  today.  Service  providers  across  Europe  still  need  to  be  aware  of  the 
obligations which are imposed on them when they want to do business in other Member 
States.  Providing  information  on  the  requirements  present  in  the  Member  States 
remains necessary. 

-How well adapted is the intervention to subsequent technological or scientific advances? 

The intervention due to being a notification procedure, is by nature technologically neutral.  

5.4. Coherence 

-To what extent is the intervention coherent internally? 

The scope of requirements covered by the current notification obligation is limited 

92 

 
 
 
The current notification obligation covers requirements under Articles 15 (establishment) and 
16  (temporary  provision  of  cross-border  services)  of  the  Services  Directive.  The  Services 
Directive also covers other type of requirements: 

-  authorisation schemes; 
- 

requirements  relating  to  the  obligation  to  exercise  a  given  specific  service  activity 
exclusively  or  which  restrict  the  exercise  jointly  or  in  partnership  of  different 
activities; 
requirements to have professional liability insurance.  

- 

These requirements are currently not covered by the notification obligation and are therefore 
not notified by the Member States. Member States however also need to assess whether such 
requirements  are  justified  and  proportionate.  Furthermore,  authorisation  schemes  applicable 
to  service  providers  wishing  to  establish  in  a  Member  States  have  to  fulfil  detailed  criteria 
according to Articles 9-14 of the Services Directive, e.g. ensuring recognition of equivalent 
controls  which  the  service  provider  already  has  been  subject  to  criteria  on  duration  of  the 
authorisation  and  on  the  selection  among  several  candidates.  However,  since  authorisation 
schemes  on  establishment  are  not  covered  by  the  notification  obligation  in  Article  15  the 
Commission and Member States may not intervene and possibly prevent the introduction of a 
scheme which does not fulfil these criteria. 

As a result, the Commission and other Member States are unaware of the presence of certain 
requirements  which  could  also  result  in  services  markets  being  restricted  and  difficult  to 
access by local and foreign services providers. 
Examples of enforcement action from the Commission on such requirements are:  

- 

the ban for an accountant to also function as a real estate agent, insurance broker or to 
perform financial activities;  

-  an authorisation system which obliges customers to use the services of the authorised 
chimney sweeper in their district and this chimney sweeper has an exclusivity right to 
perform his services in a designated area.  

Costly  and  complex  enforcement  action  on  these  requirements  could  potentially  have  been 
avoided  had  they  been  subject  to  a  dialogue  between  the  notifying  Member  State  and  the 
Commission and other Member States prior to their adoption.  

There  is  also  incoherency  in  respect  of  the  follow-up  given  in  respect  of  a  notification,  i.e. 
whether  the  Commission  can  adopt  a  Decision,  depending on  whether the  measures  effects 
the  freedom  of  establishment  or  the  freedom  to  provide  services,  which  has  been  analysed 
under effectiveness.  

The  current  the  scope  of  the  notification  obligation  is  limited.  Only  the  requirements 
covered by Articles 15 and 16 need to be notified. This despite the fact that the Services 
Directive also deals with other requirements which have an impact on service providers 
wanting to go cross-border. In addition examples exist of enforcement action necessary 
to  address  the  possible  incompatibility  of  these  requirements  which  the  Services 
Directive. This makes the intervention internally not coherent.  

93 

 
 
 
 
 
 
- To what extent in the intervention coherent with other interventions with similar objectives 
(notification obligation)? 

Notification obligation for goods and information society services: Directive (EU) 2015/1535 
of the European Parliament and of the Council of 9 September 2015 lays down a procedure 
for  the  provision  of  information  in  the  field  of  technical  regulations  and  of  rules  on 
Information Society services (former 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). 

The 2015/1535 notification procedure allows the Commission and the Member States of the 
EU  to  examine  the  technical  regulations  Member  States  intend  to  introduce  for  products 
(industrial,  agricultural  and  fishery)  and  for  Information  Society  services  before  their 
adoption. The aim is to ensure that these texts are compatible with EU law and the Internal 
Market principles. Directive (EU) 2015/1535 applies to all draft technical regulations, which 
include  technical  specifications,  other  requirements,  rules  on  services  and  regulations 
prohibiting  the  manufacture,  importation,  marketing  or  use  of  a  product  or  prohibiting  the 
provision or use of a service, or establishment as a service provider. As regards services, the 
Directive  applies  only  to  Information  Society  services  defined  as  any  service  provided  for 
remuneration, at a distance, by electronic means and at the individual request of a recipient of 
services.  

The  system  used  for  this  notification  obligation  is  transparent  in  that  external  stakeholders 
can access the notifications made by the Member States. 

The Services Directive in the last paragraph of Article 15(7) explains that the notification of a 
draft national law in accordance with Directive 98/34/EC (replaced by Directive 2015/1535) 
shall fulfil the obligation of notification provided for in the Services Directive. 

Reporting  obligation  professional  qualification:  Directive  2013/55/EU  of  the  European 
Parliament and of the Council of 20 November 2013 amending Directive 2005/36/EC on the 
recognition  of  professional  qualifications  and  Regulation  (EU)  No  1024/2012  on 
administrative  cooperation  through  the  Internal  Market  Information  System  (‘the  IMI 
Regulation’) provides for an obligation for Member States to report any change to the list of 
existing regulated professions, specifying the activities covered by each profession, and a list 
of regulated education and training, and training with a special structure, referred to in point 
(c)(ii) of Article 11, in their territory which it provided by 18 January 2016 (Article 59(1)). In 
paragraph 5 of Article 59 subsequently places upon Member States the obligation to provide 
information  on  the  requirements  they  introduced  after  18  January  2016  in  respect  of  the 
requirements they maintained, within six months of the adoption of the measure. 

In  the  Single  Market  Strategy  it  has  been  announced  that  the  Commission  will  set  out  an 
analytical  framework  for  Member  States  to  use  when  reviewing  existing  professional 
regulations  or  proposing  new  ones  to  provide  a  methodology  for  comprehensive 
proportionality  assessments  of  professions  regulations,  which  should  help  them  to 
demonstrate that public interest objectives cannot be achieved through other.  

94 

 
 
The  notification  obligation  of  the  Services  Directive  runs  parallel  to  the  notification 
obligations  presented  in  the  area  of  goods  and  information  society  services  and  to  the 
reporting  obligation  placed  upon  Member  States 
in  the  area  of  professional 
qualifications.  In  case  of  a  possible  overlap  with  notifications  taking  place  under 
Directive  2015/1535,  the  Services  Directive  provides  for  a  mechanism  to  avoid  double 
notifications.  

- To what extent is the intervention coherent with wider EU policy? 

The Single Market Strategy (SMS)92 highlighted the fact that the Single Market needs to be 
revived and modernised in a way that improves the functioning of the markets for products 
and services and guarantees appropriate protection for people. This Strategy aims to achieve 
that.  It  is  made  up  of  targeted  actions  in  three  key  areas:  (1)  creating  opportunities  for 
consumers,  professionals  and  businesses;  (2)  encouraging  and  enabling  the  modernisation 
and innovation that Europe needs; (3) ensuring practical delivery that benefits consumers and 
businesses in their daily lives.  

Effective  compliance  is  essential  to  deliver  the  opportunities  and  benefits  of  the  Single 
Market.  End-2015  12  infringement  proceedings  concerning  the  Services  Directive  were 
pending. On average, national administrations, with the help of the Commission, need almost 
30 months to resolve an infringement proceeding.  

Improving  the  delivery of  the  Services  Directive  by reforming  the  notification  procedure  is 
one of the initiatives falling within the need to provide a practical delivery.  

The SMS has identified reforming the notification procedure of the Services Directive as 
a need to improve the delivery of the Services Directive and therefore the improvement 
of the services markets. The strategy announced action to fulfil this need. The objective 
of notification procedure of the Services Directive is coherent with the objectives of the 
recently launched initiative. 

5.5. EU added value 

- What is the additional value resulting from the EU intervention, compared to what could be 
achieved by Member States at national level?  
-To what extent do the issues addressed by the intervention require action at EU level? 

The Services Directive gives Member States the possibility to introduce requirements which 
affect the freedom of establishment and the freedom to provide services. However, in order to 

92 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social  Committee  and  the  Committee  of  the  Regions,  'Upgrading  the  Single  Market:  more  opportunities  for 
people and business' , COM(2015) 550 final, 28.10.2015, 
http://ec.europa.eu/DocsRoom/documents?locale=en&tags=single-market-strategy-2015-communication 

95 

 
 
 
                                                 
avoid  these  requirements  creating  barriers  for  service  providers,  the  Services  Directive 
obliges  Member  States  to  ensure  such  requirements  to  be  proportionate  and  non-
discriminatory, justified by an overriding reason relating to the public interest.  

The  notification  obligation  in  the  Services  Directive  enables  the  Commission  and  Member 
States  to  examine  whether  the  requirements  notified  are  compatible  with  the  Services 
Directive. Considering the impact such measures have on service providers, both national and 
in  cross-border situations, it is  of the outmost  important that such  measures are verified. In 
particular given that the services market in Europe lags behind in terms of intra-community 
trade.   

If  no  notification  obligation  would  be  present  in  the  Services  Directive,  the  assessment  in 
respect of the compatibility of the requirements a Member States wishes to introduce with the 
Services  Directive  would  be  left  to  the  respective  Member  State.  The  current  amount  of 
Member States' and Commission's comments on notifications plus the ongoing infringement 
proceedings based on notifications and those concerning non-notified measures show the EU 
added value in ensuring national measures comply with the Services Directive. 

Considering that services are part of the Single Market, there is an EU added value due 
to  the  necessity  to  prevent  the  adoption  of  unjustified  barriers  preventing  service 
providers  from  benefiting  from  the  freedom  of  establishment  and  freedom  to  provide 
cross-border services.  

6. CONCLUSIONS 

The  evaluation  has  shown  that  the  existing  notification  procedure  of  the  Services 
Directive is not an effective and efficient tool to achieve the pursued objectives. Several 
factors contribute to this: an unclear and non-transparent procedure under which most 
notified measures are de facto already adopted, Decision powers are incoherent, a lack 
of  information  on proportionality assessments, important  regulatory requirements are 
not  covered  by  the  notification  obligation,  and  unclear  legal  effects  of  non-compliance 
with  the  notification  obligation.  Above  all,  Member  States  do  not  consistently  comply 
with the notification obligation. However, the need for a notification obligation remains 
highly  relevant,  and  coherent  with  other  EU  policy  actions.  With  the  existing 
notification procedure failing to reach its objectives, EU action is considered necessary 
to  address  identified  shortcomings  to  turn  the  notification  procedure  into  an  effective 
and efficient instrument for a better application of the existing Services Directive. 

9.6.  Annex 6 : Glossary 

For  the  purposes  of  the  Impact  Assessment  on  notifications  by  Member  States  of  new 
regulatory requirements on services the following definitions shall apply: 

96 

 
 
 
 

 

 

 

 

 

 

'Service'  means  any  self-employed  economic  activity,  normally  provided  for 
remuneration, as referred to in Article 57 of the Treaty. It cover for example retail of 
goods  and  services,  leisure  services,  services  provided  by  architects  and  engineers, 
construction  services  such  as  installations  and  maintenance  of  equipment,  food 
services such as hotels and restaurants, and leasing services. 

'Notification'  means  process  by  which  the  Member  States  communicate  to  the 
Commission  information  regarding  new  requirements,  including  the  communication 
of  draft  acts  and  information  on  proportionality  assessment  of  those  requirements, 
with  the  view of  their preventive assessment by the Commission and other Member 
States. 

'Draft  act'  means  a  text  laying  down  an  authorisation  scheme  or  a  requirement, 
formulated with  the view of having  it enacted as a law, regulation or administrative 
provision  of  a  general  nature,  the  text  being  at  the  stage  of  preparation  at  which 
substantial amendments can still be made by the notifying Member State 

'Requirement' means any obligation, prohibition, condition or limit provided for in 
the  laws,  regulations  or  administrative  provisions  of  the  Member  States  or  in 
consequence of case-law, administrative practice, the rules of professional 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. 

'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  financial 
equilibrium  of  the  social  security  system;  the  protection  of  consumers,  recipients  of 
services  and  workers;  fairness  of  trade  transactions;  combating  fraud;  the  protection 
of  the  environment  and  the  urban  environment;  the  health  of  animals;  intellectual 
property; the conservation of the national  historic and artistic  heritage; social  policy 
objectives and cultural policy objectives. 

'Proportionality  assessment'  means  information  provided  by  a  Member  States 
outlining the public interest objective pursued by the Member State when adopting a 
requirement  and  explaining  how  the  given  requirement  is  suitable  for  securing  the 
attainment  of  that  objective  and  does  not  go  beyond  what  is  necessary  in  order  to 
attain it, considering other possible policy options. 

'Member  State  authority’  means  a  body  or  authority  which  has  a  supervisory  or 
regulatory  role  in  a  Member  State  in  relation  to  service  activities,  including,  in 
particular,  administrative  authorities,  including  courts  acting  as  such,  professional 
bodies, and those professional associations or other professional organisations which, 

97 

 
 
 
 
 
 
 
 
in  the  exercise  of  their  legal  autonomy,  regulate  in  a  collective  manner  access  to 
service activities or the exercise thereof. 

 

'Commissions' Decision' means a Decision referred to under the Article 288 TFEU 

 

'Internal Market Information System (IMI) means the electronic tool provided by 
to  facilitate  administrative  cooperation  between  competent 
the  Commission 
authorities  of  the  Member  States  and  between  competent  authorities  of  the  Member 
States and the Commission, including notification procedure for services. 

98