Opinion of the European Committee of the Regions — The services package: A services economy that works for Europeans
Date: 2017-10-11
Institutions: Commission for Economic Policy, European Committee of the Regions
Subjects: access to a profession, administrative formalities, free movement of workers, freedom to provide services, information system, professional qualifications, provision of services, right of establishment, service, single market




C_2018054EN.01008101.xml










13.2.2018   


EN


Official Journal of the European Union


C 54/81





Opinion of the European Committee of the Regions — The services package: A services economy that works for Europeans
(2018/C 054/15)












Rapporteur:



Jean-Luc Vanraes (BE/ALDE), Member of Uccle Municipal Council





Reference documents:



Proposal for a Regulation of the European Parliament and of the Council introducing a European services e-card and related administrative facilities
COM(2016) 824 final
Proposal for a Directive of the European Parliament and of the Council on the legal and operational framework of the European services e-card introduced by Regulation [ESC Regulation] …
COM(2016) 823 final
Proposal for a directive of the European Parliament and of the Council on a proportionality test before adoption of new regulation of professions
COM(2016) 822 final
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
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on reform recommendations for regulation in professional services
COM(2016) 820 final








I.   RECOMMENDATIONS FOR AMENDMENTS


Amendment 1

Proposal for a Directive 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

Recital 7

Amend






Text proposed by the Commission


CoR amendment




The notification obligation established by this Directive should apply to regulatory measures of Member States, such as laws, regulations, administrative provisions of general nature or any other binding rule of general nature, including rules adopted by professional organisations to regulate in a collective manner access to service activities or the exercise thereof. The notification obligation should on the other hand not apply to individual decisions issued by national authorities.


The notification obligation established by this Directive should apply to regulatory measures of Member States, such as laws, regulations, administrative provisions of general nature or any other binding rule of general nature, including rules adopted by professional organisations to regulate in a collective manner access to service activities or the exercise thereof. The notification obligation should on the other hand not apply to individual decisions issued by national authorities.


Amendments or modifications to draft measures introduced by legislative assemblies or national, regional and local parliaments during the parliamentary procedure should not be covered by the notification obligation laid down by this Directive. For the purposes of this Directive, the notification obligation should be considered to have been fulfilled when the draft measure is implemented and finally adopted at the end of the parliamentary procedure.








Reason


The proposal does not contain a procedure for amendments or modifications to draft measures introduced by legislative assemblies.

Amendment 2

Proposal for a Directive 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

Recital 15

Delete






Text proposed by the Commission


CoR amendment






Failure to comply with the obligation to notify draft measures at least three months prior to their adoption and/or to refrain from adopting the notified measure during this period and, as the case may be, during the 3 months following the reception of an alert, should be considered to be a substantial procedural defect of a serious nature as regards its effects vis-à-vis individuals.




 






Reason


The consequence of the EC proposal is that draft measures that have not been notified will not be enforceable. This will have grave consequences for the enforcement of local and regional measures because the scope of the services directive is very broad and sometimes still evolving in case law of ECJ.

Amendment 3

Proposal for a Directive 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

Article 3(2)

Amend as follows






Text proposed by the Commission


CoR amendment




1.   Member States shall notify to the Commission any draft measure that introduces new requirements or authorisation schemes referred to in Article 4, or modifies such existing requirements or authorisation schemes.


1.   Member States shall notify to the Commission any draft measure that introduces new requirements or authorisation schemes referred to in Article 4, or modifies such existing requirements or authorisation schemes.




2.   Where a Member State modifies a notified draft measure with the effect of significantly extending its scope or content, or shortening the timetable originally envisaged for implementation, or adding requirements or authorisation schemes, or making those requirements or authorisation schemes more restrictive for the establishment, or the cross-border provision of services, it shall notify the modified draft measure previously notified under paragraph 1 again, including an explanation of the objective and content of the modifications. In such a case, the previous notification shall be deemed to be withdrawn


 








a)




Where a Member State modifies a notified draft measure with the effect of significantly extending its scope or content, or shortening the timetable originally envisaged for implementation, or adding requirements or authorisation schemes, or making those requirements or authorisation schemes more restrictive for the establishment, or the cross-border provision of services, it shall notify the modified draft measure previously notified under paragraph 1 again, including an explanation of the objective and content of the modifications. In such a case, the previous notification shall be deemed to be withdrawn.












b)






Member States shall not be obliged to notify the changes made during the parliamentary procedure to a draft measure that has been already notified. However, Member States shall notify the draft measure containing those changes to the Commission once it has been adopted
.








3.   Draft measures referred to in paragraphs 1 and 2 shall be notified to the Commission at least three months prior to their adoption.


3.   Draft measures referred to in paragraphs 1 and 2 shall be notified to the Commission at least three months prior to their adoption.




4.   The breach of one of the obligations set out in Article 3(1), (2) and (3) or in Article 6(2) shall constitute a substantial procedural defect of a serious nature as regards its effects vis-à-vis individuals.


4.   The breach of one of the obligations set out in Article 3(1), (2) and (3) or in Article 6(2) shall constitute a substantial procedural defect of a serious nature as regards its effects vis-à-vis individuals.




5.   Member States shall, as part of any notification, provide information demonstrating the compliance of the notified authorisation scheme or requirement with Directive 2006/123/EC.
That information shall identify the overriding reason relating to the public interest pursued and give the reasons why the notified authorisation scheme or requirement is non-discriminatory on grounds of nationality or residence and why it is proportionate.
That information shall include an assessment demonstrating that less restrictive means are not available as well as specific evidence substantiating the arguments put forward by the notifying Member State.


5.   Member States shall, as part of any notification, provide information demonstrating the compliance of the notified authorisation scheme or requirement with Directive 2006/123/EC.
That information shall identify the overriding reason relating to the public interest pursued and give the reasons why the notified authorisation scheme or requirement is non-discriminatory on grounds of nationality or residence and why it is proportionate.
That information shall include an assessment demonstrating that less restrictive means are not available as well as specific evidence substantiating the arguments put forward by the notifying Member State.




6.   In the notification, the Member State concerned shall also communicate the text of the legislative or regulatory provision that underlies the notified draft measure.


6.   In the notification, the Member State concerned shall also communicate the text of the legislative or regulatory provision that underlies the notified draft measure.




7.   Member States concerned shall communicate the adopted measure within two weeks following its adoption.


7.   Member States concerned shall communicate the adopted measure within two weeks following its adoption.




8.   For the purpose of the notification procedure established by this Directive and to ensure the exchange of information between the notifying Member State, other Member States and the Commission, the Internal Market Information System set out in Regulation (EU) No 1024/2012 shall be used.


8.   For the purpose of the notification procedure established by this Directive and to ensure the exchange of information between the notifying Member State, other Member States and the Commission, the Internal Market Information System set out in Regulation (EU) No 1024/2012 shall be used.






Reason


The proposal does not contain a procedure for amendments or modifications to draft measures introduced by legislative assemblies.

Amendment 4

Proposal for a Directive 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

Article 3(4)

Delete






Text proposed by the Commission


CoR amendment






The breach of one of the obligations set out in Article 3(1), (2) and (3) or in Article 6(2) shall constitute a substantial procedural defect of a serious nature as regards its effects vis-à-vis individuals.




 






Reason


The consequence of the EC proposal is that draft measures that have not been notified will not be enforceable. This will have grave consequences for the enforcement of local and regional measures because the scope of the services directive is very broad and sometimes still evolving in case law of ECJ.
The proposed sanction would prompt huge legal uncertainty, since the most trivial formal breaches in notification would prevent implementation of even unproblematic projects that clearly complied materially with EU law.

Amendment 5

Proposal for a Directive 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

Article 3(8)

Add a new article after article 3(8)






Text proposed by the Commission


CoR amendment




 




Article 3(3) shall not apply where a Member State is required to adopt measures introducing new authorisation schemes or requirements or to modify existing authorisation schemes in a very short space of time for urgent reasons occasioned by serious and unforeseeable circumstances relating to the protection of public policy, public security, public health or the protection of the environment;








Reason


Self-explanatory

Amendment 6

Proposal for a Directive 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

Article 5(2)

Amend as follows






Text proposed by the Commission


CoR amendment




As from the date of the Commission informing the notifying Member State of the completeness of a notification received, a consultation of maximum three months shall take place among the notifying Member State, other Member States and the Commission.


As from the date of the Commission informing the notifying Member State of the completeness of a notification received, a consultation of maximum three months shall take place among the notifying Member State, other Member States and the Commission. 
The consultation shall not prevent the notifying Member State from adopting the relevant provisions, which may, however, not be executed until the end of the consultation period.








Reason


The proposed blocking period is too rigid. It would lead to undue delays in the process. Member States should therefore be free to adopt the measures concerned, but should freeze any execution until the end of the consultation period.

Amendment 7

Proposal for a Directive 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

Article 6


Alert

Amend






Text proposed by the Commission


CoR amendment




1.   Before the closure of the consultation period referred to in Article 5(2), the Commission may alert the notifying Member State of its concerns about the compatibility with Directive 2006/123/EC of the draft measure notified and of its intention to adopt a 
Decision
 referred to in Article 7.


1.   Before the closure of the consultation period referred to in Article 5(2), the Commission may alert the notifying Member State of its concerns about the compatibility with Directive 2006/123/EC of the draft measure notified and of its intention to adopt a 
Recommendation
 referred to in Article 7. 
This alert notification shall set out the reasons for the Commission's concerns and, if appropriate, any changes to the draft measure notified that the Commission considers would deal with these concerns in a satisfactory way.






2.   Upon receipt of such an alert, the 
notifying Member State shall not adopt the draft measure
 for a period of three months 
after
 the closure of the consultation period.


2.   Upon receipt of such an alert, the 
Commission shall engage in a dialogue with the relevant competent bodies including at regional and local levels
 for a period of three months. 
An alert issued by the Commission to a Member State shall not prevent that Member State from adopting the draft measure, which may, however, not be executed, until
 the closure of the consultation period.






Reason


To ensure that the competent bodies in the Member State are fully informed about the Commission's concerns, and the reasons for these, and to ensure timely and robust discussion of these with the competent bodies in the Member State.

Amendment 8

Proposal for a Directive 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

Article 7


Decision

Amend






Text proposed by the Commission


CoR amendment




Article 7


Decision


Where the Commission has issued an alert in accordance with Article 6(1), it may, within a period of three months after the date of the closure of the consultation period referred to in Article 5(2), adopt a 
Decision
 finding the draft measure to be incompatible with Directive 2006/123/EC and 
requiring
 the Member State concerned 
to refrain from adopting the draft measure or, if such measure has been adopted in breach of Article 3(3) or Article 6(2), to repeal it
.


Article 7


Recommendation


Where the Commission has issued an alert in accordance with Article 6(1), it may, within a period of three months after the date of the closure of the consultation period referred to in Article 5(2), adopt a 
non-binding Recommendation
 finding the draft measure to be incompatible with Directive 2006/123/EC and 
informing
 the Member State concerned 
of its intention, should the measure be adopted, to bring an action before the Court of Justice of the European Union challenging the compatibility of the measure with Directive 2006/123/EC.








Reason


The Commission's proposal for a Decision is unacceptable as it would unduly restrict the freedom of legislators at national and regional level. A non-binding Recommendation notifying of the Commission's intention to challenge the legality of the measure should it be adopted can, in the context of the other provisions of the draft legislation, provide an improved notification procedure that is effective while also respecting the prerogatives of national and regional legislators.

Amendment 9

Proposal for a Directive on a proportionality test before adoption of new regulation of professions
COM(2016) 822 final/1

Recital 9

Amend as follows






Text proposed by the Commission


CoR amendment




The burden of proof of justification and proportionality lies on the Member States. The reasons for regulation invoked by a Member State by way of justification should thus be accompanied by an analysis of the appropriateness and proportionality of the measure adopted by that State and by specific evidence substantiating its arguments.


The burden of proof of justification and proportionality lies on the Member States. The reasons for regulation invoked by a Member State by way of justification should thus be accompanied by an analysis of the appropriateness and proportionality of the measure adopted by 
the relevant authorities in
 that State and by specific evidence substantiating its arguments.






Reason


This causes additional administration out of all proportion to the potential outcomes.

Amendment 10

Proposal for a Directive on a proportionality test before adoption of new regulation of professions
COM(2016) 822 final/1

Recital 12

Add a new recital after recital 12






Text proposed by the Commission


CoR amendment




 




New recital




it is up to the relevant public authorities in the Member States to assess the proportionality of a measure, based on the criteria set out in the Directive. These individual assessments may lead to different legitimate results in different Member States.








Reason


Self-explanatory.

Amendment 11

Proposal for a Directive on a proportionality test before adoption of new regulation of professions
COM(2016) 822 final/1

Recital 18

Amend






Text proposed by the Commission


CoR amendment




The economic impact of the measure, 
including a cost-benefit analysis
 with particular regard to the degree of competition in the market and the quality of the service provided, as well as the impact on the right to work and on the free movement of persons and services within the Union should be duly taken into account by the competent authorities. Based on this analysis, Member States should ascertain, in particular, whether the extent of the restriction of access to or pursuit of regulated professions within the Union is proportionate to the importance of the objectives pursued and the expected gains.


The economic impact of the measure, with particular regard to the degree of competition in the market and the quality of the service provided, 
the impact in terms of territorial cohesion,
 as well as the impact on the right to work and on the free movement of persons and services within the Union should be duly taken into account by the competent authorities. Based on this analysis, 
the relevant public authorities in the
 Member States should ascertain, in particular, whether the extent of the restriction of access to or pursuit of regulated professions within the Union is proportionate to the importance of the objectives pursued and the expected gains.






Reason


Self-explanatory

Amendment 12

Proposal for a Directive on a proportionality test before adoption of new regulation of professions
COM(2016) 822 final/1

Recital 21

Amend






Text proposed by the Commission


CoR amendment




It is essential for the proper functioning of the internal market to ensure that Member States provide information to citizens, representative associations or other relevant stakeholders before introducing new measures restricting access to or pursuit of regulated professions and give them the opportunity to make known their views.


It is essential for the proper functioning of the internal market to ensure that 
the relevant public authorities in the
 Member States provide information to citizens, 
local and regional authorities, the social partners,
 representative associations or other relevant stakeholders before introducing new measures restricting access to or pursuit of regulated professions and give them the opportunity to make known their views.






Reason


Self-explanatory

Amendment 13

Proposal for a Directive on a proportionality test before adoption of new regulation of professions
COM(2016) 822 final

Article 6



Proportionality


Amend as follows






Text proposed by the Commission


CoR amendment




1.   Before introducing new legislative, regulatory or administrative provisions restricting access to or pursuit of regulated professions, or amending existing ones, Member States shall assess whether those provisions are necessary and suitable for securing the attainment of the objective pursued and do not go beyond what is necessary to attain that objective.


1.   Before introducing new legislative, regulatory or administrative provisions restricting access to or pursuit of regulated professions, or amending existing ones, Member States shall assess whether those provisions are necessary and suitable for securing the attainment of the objective pursued and do not go beyond what is necessary to attain that objective.




2.   When assessing the necessity and the proportionality of the provisions, the relevant competent authorities shall consider in particular:


2.   When assessing the necessity and the proportionality of the provisions, the relevant competent authorities shall consider in particular:










(a)


the nature of the risks related to the public interest objectives pursued, in particular the risks to consumers, 
to
 professionals or third parties;












(a)


the nature of the risks related to the public interest objectives pursued, in particular the risks to 
service recipients, including
 consumers 
and other non-professional service recipients,
 professionals
, the social partners, local and regional authorities
 or third parties;














(b)


the suitability of the provision namely as regards its appropriateness to attain the objective pursued and whether it genuinely reflects that objective in a consistent and systematic manner and thus, addresses the risks identified in a similar way as in comparable activities;












(b)


the suitability of the provision namely as regards its appropriateness to attain the objective pursued and whether it genuinely reflects that objective in a consistent and systematic manner and thus, addresses the risks identified in a similar way as in comparable activities;














(c)


the necessity of the provision and in particular whether existing rules of a specific or more general nature, such as product safety legislation or consumer protection law, are insufficient to protect the objective pursued;












(c)


the necessity of the provision and in particular whether existing rules of a specific or more general nature, such as product safety legislation or consumer protection law, are insufficient to protect the objective pursued;














(d)


the link between the scope of activities covered by a profession or reserved to it and the professional qualification required;












(d)


the link between the scope of activities covered by a profession or reserved to it and the professional qualification required;














(e)


the link between the complexity of the tasks and the necessary possession of specific professional qualifications, in particular as regards the level, the nature and the duration of the training or experience required, as well as the existence of different routes to obtain the professional qualification;












(e)


the link between the complexity of the tasks and the necessary possession of specific professional qualifications, in particular as regards the level, the nature and the duration of the training or experience required, as well as the existence of different routes to obtain the professional qualification;














(f)


the scope of the professional activities reserved to holders of a particular professional qualification, namely whether and why the activities reserved to certain professions can or cannot be shared with other professions;












(f)


the scope of the professional activities reserved to holders of a particular professional qualification, namely whether and why the activities reserved to certain professions can or cannot be shared with other professions;














(g)


the degree of autonomy in exercising a regulated profession and the impact of organisational and supervision arrangements on the attainment of the objective pursued, in particular where the activities relating to a regulated profession are pursued under the control and responsibility of a duly qualified professional;












(g)


the degree of autonomy in exercising a regulated profession and the impact of organisational and supervision arrangements on the attainment of the objective pursued, in particular where the activities relating to a regulated profession are pursued under the control and responsibility of a duly qualified professional;














(h)


the scientific and technological developments which may reduce the asymmetry of information between professionals and consumers;












(h)


the scientific and technological developments which may reduce the asymmetry of information between professionals and consumers;














(i)


the economic impact of the measure, with particular regard to the degree of competition in the market and the quality of the service provided, as well as the impact on the free movement of persons and services within the Union;












(i)


the economic 
and social
 impact of the measure, with particular regard to the degree of competition in the market and the quality of the service provided, as well as the impact on the free movement of persons and services within the Union;














(j)


the possibility to use less restrictive means to achieve the public interest objective;












(j)


the possibility to use less restrictive means to achieve the public interest objective;














(k)


the cumulative effect of restrictions to both access to and pursuit of the profession
, and in particular how each of those requirements contributes to and whether it is necessary to achieve the same public interest objective
.












(k)


the cumulative effect of restrictions to both access to and pursuit of the profession.








 




When assessing the necessity and the proportionality of the provisions the competent authorities shall apply the criteria 2(a) to 2(k), inclusive, in a considered manner having regard to the particular circumstances of the individual case. Where they consider that any particular criterion is not relevant they may exclude it from the assessment but shall provide a justification for this exclusion.






3.   For the purposes of paragraph 2(j), where the measures are justified by consumer protection and where the risks identified are limited to the relationship between the professional and the consumer without negatively affecting third parties, the relevant competent authorities shall assess in particular whether the objective can be attained by protected professional title without reserving activities.


3.   For the purposes of paragraph 2(j), where the measures are justified by consumer protection and where the risks identified are limited to the relationship between the professional and the consumer without negatively affecting third parties, the relevant competent authorities shall assess in particular whether the objective can be attained by protected professional title without reserving activities.




4.   For the purposes of paragraph 2(k), the relevant competent authorities shall assess in particular the cumulative effect of imposing any of the following requirements:


4.   For the purposes of paragraph 2(k), the relevant competent authorities shall assess in particular the cumulative effect of imposing any of the following requirements:










(a)


reserved activities, existing alongside protected professional title;












(a)


reserved activities, existing alongside protected professional title;















(b)





continuous professional development requirements;














(b)


rules relating to the organisation of the profession, professional ethics and supervision;














(c)


rules relating to the organisation of the profession, professional ethics and supervision;












(c)


compulsory chamber membership, registration or authorisation schemes, in particular where those requirements imply the possession of a particular professional qualification;














(d)


compulsory chamber membership, registration or authorisation schemes, in particular where those requirements imply the possession of a particular professional qualification;












(d)


quantitative restrictions, in particular requirements limiting the number of authorisations to practise, or fixing a minimum or a maximum number of employees, managers or representatives holding particular professional qualifications;














(e)


quantitative restrictions, in particular requirements limiting the number of authorisations to practise, or fixing a minimum or a maximum number of employees, managers or representatives holding particular professional qualifications;












(e)


specific legal form requirements or requirements which relate to the shareholding or management of a company, to the extent those requirements are directly linked to the exercise of the regulated profession;














(f)


specific legal form requirements or requirements which relate to the shareholding or management of a company, to the extent those requirements are directly linked to the exercise of the regulated profession;












(f)


territorial restrictions, in particular where the profession is regulated in parts of a Member State’s territory in a different manner;














(g)


territorial restrictions, in particular where the profession is regulated in parts of a Member State’s territory in a different manner;












(g)


requirements restricting the exercise of a regulated profession jointly or in partnership, as well as incompatibility rules;














(h)


requirements restricting the exercise of a regulated profession jointly or in partnership, as well as incompatibility rules;












(h)


requirements concerning insurance cover or other means of personal or collective with regard to professional liability;














(i)


requirements concerning insurance cover or other means of personal or collective with regard to professional liability;












(i)


language knowledge requirements, to the extent necessary to practise the profession.














(j)


language knowledge requirements, to the extent necessary to practise the profession.






 






Reason


The catalogue of criteria set out in Article 6 should be considered indicative, as not all criteria will be applicable or of the same importance in every individual case and a ‘one-size-fits-all’ approach would be excessive and needlessly burdensome on the competent authorities in the Member States.
II.   POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS


Importance and urgency of completing the Single Market in services










1.


underlines the importance of the Single Market for boosting economic growth, increasing investment, raising living standards and creating jobs in regions and cities across the EU;












2.


stresses the urgency of completing the Single Market for goods and services as set out in the Single Market Strategy and points out that many of the most significant remaining economic barriers are in the area of services;












3.


underlines that services are the major component of the European economy, accounting for around 70 % of both GDP and jobs; points out, however, that the EU services sector is characterised by slow productivity growth and weak competition, which hold back its potential; stresses that removing barriers to the cross-border provision of services resulting from diverging national rules and procedures would give services providers and customers greater opportunities to make full use of the potential of the internal market; consequently urges the European Commission and the Member States to continue adopting measure to accelerate the service sector's competitiveness, boost competition between companies and remove the legal and procedural barriers that slow down the cross-border service provision;












4.


stresses that services are an important intermediate input in the economy and that competitive services, particularly business services, are crucial for productivity and cost competitiveness in other sectors such as manufacturing which are vital for regional and local economies;












5.


points out that, ten years after its adoption, the potential of the Services Directive to enhance the free movement of services has not yet been fully realised and that providers in a range of services sectors still face a wide array of barriers when they want to establish in another Member State or provide services on a temporary cross-border basis; urges the Commission and the Member States to continue adopting measures to remove these obstacles; notes that estimates indicate that tackling the barriers to cross-border trade and investment in services under the framework already provided by the Services Directive could add 1,7 % to the GDP of the EU;












6.


welcomes the Commission's concern to dismantle unwarranted bureaucratic hurdles in the provision of services and believes the proposals can make a contribution to creating a real Single Market in services, which would also spur economic growth, investment and employment in Europe's regions and cities; highlights, however, the need to respect the principles of proportionality and subsidiarity when implementing the services package;












7.


stresses the inter-interlinkages between the various components of the package and the necessity to consider them as part of an integrated whole and to assess the merits of the individual proposals in that context;












8.


considers that the proposal for the notification procedure should most probably be amended in the light of the European Court of Justice judgement in the Case C-320/16 Uber France SAS for which the advocate general delivered his preliminary opinion on 4 July 2017, stating that ‘member states may prohibit and punish the illegal exercise of a transport activity such as Uberpop without having to notify the Commission of the draft law in advance’;






Services e-card










9.


points out that the Services Directive requires Member States to reduce administrative obstacles that deter service providers from operating cross-border but has not been fully effective in this respect;












10.


welcomes the new services e-card as a helpful contribution to promote the mobility of service providers, but requests clarification about the extent to which the new services e-card relates to already existing schemes such as the Internal Market Information System (IMI) and the European Professional Card. Believes that the e-card can help to reduce administrative complexity and costs for cross-border service providers when fulfilling administrative formalities; SMEs, which are the backbone of regional and local economies, are particularly affected here as they are the most impacted by administrative complexity when operating cross-border;












11.


is opposed to the approach of shifting the main responsibility for the procedure to the home Member State authorities insofar as that is in conflict with the host Member State principle governing the Services Directive. Indeed, the services e-card should not prevent or hinder controls that the relevant public authorities in the host Member State must conduct on economic activities performed in its territory. The services e-card proposal as presented by the Commission would allow service providers to deal exclusively with the home Member State as an intermediary and harmonise the exchange of data based on the country-of-origin principle;












12.


wonders about the impact of the proposal for a European services e-card on the sectoral social identity cards that have already been introduced at the initiative of the competent public authorities in the Member States or of the social partners;












13.


notes that the proposal does not specify what criteria the home Member State should use to determine that a service provider is lawfully established on its territory, whilst Directive 2014/67/EU provides a list of factual elements for determining whether an undertaking genuinely performs substantial activities in the Member State in question;












14.


points out in this context that the issuing of A1 portable documents in connection with the posting of workers has already revealed potential pitfalls caused by the fact that it depends solely on the home Member State to validate the data concerning incoming service providers, in particular in the case of bogus self-employed workers. In this regard, the impact assessment accompanying the proposed amendment to Directive 96/71/EC concerning the posting of workers states: ‘The accuracy of the information contained in PD A1 documents cannot be guaranteed due to the lack of formal controls by the authorities in the sending countries, among other things’ (1);












15.


points out that some features of the services e-card such as the ‘once only’ principle for submitting information, its indefinite validity period, the obligation for the Member States to use the information contained in the services e-card without the possibility of requesting proof of the validity of the information provided at a later stage, and restrictive revocation procedures that may require a final decision by the courts, are liable to significantly endanger monitoring of compliance with national laws and the enforcement of workers' rights and consumers' rights;












16.


notes that the European services e-card is supposed to include information on insurance coverage. However, the unlimited validity of the card suggests that this information will only need to be submitted once, which risks making inspections and checks in the host Member States less effective;












17.


highlights the fact that the services e-card would be available to both service providers providing services cross-border on a temporary basis and those providing services through establishing a branch, agency or office in another Member State;












18.


considers it important that, while it is mandatory for Member States to make it available, the e-card is voluntary for service providers, whether self-employed individuals or companies;












19.


points out that, as a voluntary instrument, the uptake of the services e-card will depend on its manifest value-added for service providers and also on the efforts of the business community and relevant authorities in the Member States, including at regional and local levels, to promote as wide awareness as possible of the e-card and its benefits;












20.


is critical of tacit approval in the event of there being no response by the host Member State authority to a service provider's application for an e-card within the timeframes laid down; either such deemed validation should be deleted entirely or at least appropriate assessment and processing times should be chosen;












21.


regrets that important aspects of the services e-card, including the details of the information to be contained in the standard application form and the documents to be included in the application as supporting evidence, are not included in the draft legislation, but are intended to be specified by the Commission in delegated acts; points out that this could exclude regional and local authorities from having any say on these important issues; requests that the European Committee of the Regions receive all documents related to these delegated acts at the same time as Member States' experts, the European Parliament and the Council and have access to meetings of Commission expert groups dealing with the preparation of relevant delegated acts so that it can submit any necessary comments in good time;












22.


notes that the scope of the e-card is limited in the first stage to business services and construction services, sectors which are of particular economic importance but which have both limited cross-border trade and investment and poor productivity growth, and which therefore could benefit from increased cross-border competition;












23.


emphasises that the good functioning of the services e-card system will rely on cooperation between Member States implemented via the Internal Market Information System, which includes regional and local authorities, and this requires enhanced use of the platform by public authorities and more investment in its development; bearing in mind also that implementation of other important elements of the services package, notably the notification procedure, will depend on its effectiveness, calls on the Commission to come forward with an action plan for adapting the platform to support the necessary procedures;












24.


calls on the Commission to ensure that the system for processing service e-cards should comply with existing e-processing systems in the Member States and that interoperability with the Member States be facilitated;












25.


calls on the European Commission to further extend the scope of the services e-card, so that in future it is available to as many sectors as possible, including small and micro-enterprises and innovative and high-growth companies;












26.


supports the concept of service providers being charged fees for being issued with a services e-card on the basis that fee levels are not disproportionately high; recommends that the Commission closely monitor and report on the fee levels being charged by Member States as these could be an important determinant of the uptake of the e-card as a voluntary instrument;












27.


considers that a strong feature of the services e-card from the point of view of service providers is the provision whereby authorities in Member States may not require an e-card holder to provide any information already contained in the e-card, including for the award of a public contract, a design contest or a concession, formation of subsidiaries or registration of branches under company law or registration with mandatory social insurance schemes, as this will reduce service providers' administrative compliance costs generally and thus make the card attractive to them and encourage its uptake;












28.


underlines that this may have practical implications for organisational and electronic procedures, e.g. those for public procurement in regional and local authorities, and transitional periods may be necessary to allow for the smooth adaptation of systems to meet the new requirements;












29.


supports the provisions to facilitate compliance with administrative formalities related to the posting of staff and those to facilitate insurance coverage for services provided across borders as these will also increase the attractiveness of the e-card for service providers and encourage its uptake;












30.


underlines that the legislation, in line with the provisions of the Services Directive, does not affect the definition or organisation of services of general economic interest and does not apply to non-economic services of general interest, services that are often provided at local and regional level, and does not affect employment law or employment conditions;












31.


calls on the Commission to introduce effective monitoring systems for the services e-card, in order to prevent unfair competition and fraudulent practices. The strict application of checks, which are not merely based on the monitoring of electronic data, would reduce potential social dumping and undeclared work;












32.


would question whether the right balance is achieved between the benefits for service providers of introducing the services e-card and the resulting red tape for the Member State authorities concerned, including at local and regional level, considering also that a single point of contact is already available in every Member State for any questions and problems relating to the provision of cross-border services and that Member State authorities can exchange information through the IMI system. Regrets furthermore that the proposal does not clearly specify which administrative obligations on service providers will become superfluous for holders of an e-card. In view of the above, the Committee perceives a proportionality issue with the services e-card;






Notification procedure for improved notification of draft national laws on services










33.


supports the principles that national rules restricting the freedom of establishment and the freedom to provide services should be non-discriminatory with regard to nationality or residence, proportionate and justified by overriding reasons relating to the public interest;












34.


supports steps to improve the notification procedure for services as experience with the implementation of the services directive indicates that the existing procedure is ineffective as the scope of the notification obligation is unclear, it is therefore tackled differently by Member States, and stakeholders do not have access to notifications;












35.


considers that any reform should respect Member States' right to regulate services in their territory subject to compliance with the principles set out in the Services Directive;












36.


points out that the problems identified by the European Commission, such as failure to notify all measures, could also be avoided by improving the current notification system under the Services Directive. The added value of the new notification procedure, which imposes more restrictions on the national legislator, including at regional and local level, and is more complicated to implement, should be questioned in the light of the subsidiarity and proportionality principles;












37.


welcomes the clarification of the specific measures that Member States are obliged to notify and the information that they must submit in this regard;












38.


supports greater transparency but thinks that more explicit mention should be made of the specific opportunities that stakeholders would be given to contribute comments during the consultation period;












39.


calls for legislation with only local relevance to be exempted from the scope of the directive;












40.


takes the view that the consultation should not prevent the Member States adopting the measure in question;












41.


is of the opinion that the Commission's alert under Article 6(1) should set out in detail the reasons why it considers the draft measure in question to be incompatible with the Services Directive and any suggestions it may have for changes to the draft measure that would overcome its concerns; suggests that the draft directive be amended to provide for this;












42.


considers that, following the issuing of an alert, the Commission should be required to engage in a dialogue with the relevant competent bodies, including at regional and local level;












43.


is concerned that the proposed Decision under Article 7 would unduly restrict the freedom of legislators at national, regional and local level; considers that this should instead be a non-binding Recommendation that would not prevent national and regional lawmakers from completing the legislative process taking into account the Commission's Recommendation; notes that the Commission is empowered to challenge the legality of enacted legislation in the European Court of Justice and this represents an important potential sanction which national and regional lawmakers, who had received an alert notification/Recommendation regarding incompatibility from the Commission, would surely take into account;












44.


considers that the clarifications that the draft directive provides in relation to the scope of the measures to be notified and the information to be submitted, together with enhanced consultation, an alert mechanism and provision for a Commission Recommendation regarding incompatibility, should be sufficient to provide an improved notification procedure that is effective while respecting the prerogatives of national and regional legislators;












45.


suggests that the Commission prepare estimates of the annual increase in the number of notifications it expects to receive as a result of new notification procedure so that, if necessary, it can make plans to have in place the capacity to effectively respond to the expected volumes in the timeframes provided for in the draft legislation;






Proportionality test (proportionality assessment of national rules on professional services)










46.


emphasises that professional services are economically very important, accounting for 22 % of those employed across the EU, or 47 million jobs;












47.


underlines that the regulation of professional services remains a prerogative of the Member States and that it is a matter for Member States, be it at national, regional or local level, to decide whether and how to regulate a profession within the limits of the principles of non-discrimination and proportionality;












48.


notes that regulation of professional services can be in the form of State regulation or self-regulation by professional bodies and that, in many cases, regulation is carried out at the regional and local levels in the Member States, and that this makes for a very complex and dispersed landscape in which Member States must fulfil their obligations to ensure proportionality assessment, including as concerns the involvement of all the stakeholders who are directly implicated;












49.


recognises that there is uneven scrutiny of the regulation of professions across the EU and that this has a negative effect on the provision of services and the mobility of professionals; recognises that it is desirable to ensure a more coherent legal framework at EU level for assessing the proportionality of new or amended requirements on access to or the pursuit of a regulated profession, incorporating the case-law of the European Court of Justice;












50.


considers it important that the proposal would leave decisions on what to regulate and how to Member States and their competent bodies at regional and local level but should ensure these decisions are evidence-based and made following a transparent and objective assessment that is applied evenly across the Member States and which takes account of identified public interest objectives;












51.


is of the view that the comprehensive set of criteria set out in Article 6 should be considered indicative, as not all criteria are likely to be applicable or of the same importance in every individual case; considers that, while proportionality assessments must be thorough, objective and evidence-based, they should also be commensurate, as a ‘one size fits all’ approach could be unnecessarily burdensome in many circumstances. The requirements of Article 6 also go too far in their scope and complexity;












52.


welcomes the provisions for affording stakeholders an opportunity to contribute their views on new legislative, regulatory or administrative provisions restricting access to or the pursuit of regulated professions and considers that transparency and the engagement of all interested parties are vital for ensuring proper regulation;












53.


points out that the new proportionality rules, which involve monitoring of legal, regulatory and administrative provisions on a regular basis and carrying out thorough, objective and evidence-based proportionality tests, including through the involvement of independent scrutiny boards and with wider stakeholder engagement, will increase the workload and costs of Member State authorities, including at regional and local level. This applies in particular to Article 4, under which not only the introduction of new provisions on regulated professions, but also amendments to existing ones, would have to be assessed for their proportionality, a requirement that can be considered excessive;






Guidance towards reforming and reducing the number of regulated professions










54.


notes the Commission's efforts to ensure that the regulation of professions is fit for purpose by encouraging Member States to review whether their professional requirements are necessary to fulfil national public policy objectives;












55.


welcomes the guidance for national reforms in the regulation of professions, which could be potentially very useful in helping Member States to adapt their regulatory frameworks for professions with high growth and jobs potential, including architects, lawyers, accountants, patent agents, real estate agents and tourist guides;












56.


notes that the guidance is intended to complement the European Semester evaluations and considers that there may be merit in its integration with the European Semester process;






Subsidiarity and proportionality issues










57.


considers that aspects of the proposals in the services package raise important issues concerning subsidiarity and proportionality (2); points out that several national and regional parliaments have issued reasoned opinions pointing to subsidiarity and proportionality issues, including concerns about potential interference in national legislative procedures;






Implications for administrative burden and administrative capacity










58.


is concerned that the proposals for the services e-card, notification procedure and proportionality test will impose additional administrative burdens on competent authorities in the Member States, including regional and local authorities, with consequential administrative capacity and budgetary implications.





Brussels, 11 October 2017.


The President of the European Committee of the Regions

Karl-Heinz LAMBERTZ




(1)  SWD(2016) 52, p. 8.

(2)  Several national and regional parliaments have pointed out that the measures proposed in the directives concerning the notification procedure and proportionality test go beyond what the chosen legal basis allows. Several national and regional parliaments have issued reasoned opinions pointing to subsidiarity issues regarding the notification procedure, as the Commission and other Member States could potentially interfere in national legislative procedures; the proportionality test, as the proposed measures go beyond the indicated legal basis, interfere in the competence of Member States and are unnecessary; and the services e-card, as its introduction in the form proposed does not generate sufficient added value. With regard to proportionality, several national and regional parliaments consider that a directive on a proportionality test is not required and less stringent recommendations would be more appropriate, that the catalogue of criteria is excessive and the proposal does not leave enough room for national decisions to achieve the intended objectives. With regard to the services e-card, parliaments consider that the administrative workload to ensure compliance with a complex procedure is likely to increase considerably and the strict timelines are disproportionate; that the proposed rules would lead to the introduction of a country-of-origin principle; that services e-cards could be issued without conducting checks, given the short time limits for assessments; and that the proposals go beyond what is necessary to achieve the intended objectives.