Lecture Notes: Free Movement of Services in the EU
Introduction
Right of establishment covers rights for companies.
Focus on free movement of services: Articles 56 and 57 of the Treaty on the Functioning of the European Union (TFEU).
Free Movement of Services
Key Articles
Article 56: Principle of free movement of services on a temporary basis. Applies when a person established in one member state moves to another to provide/receive services temporarily.
Article 57: Defines services and applies the principle of equal treatment to service providers.
Historical Context
Free movement of services seen as subordinate to other freedoms (goods, persons, capital).
Applies only when the situation is not governed by other freedoms.
Three Situations for Free Movement of Services
Service Provider Movement: Providers may move to offer professional services (e.g. lawyers, doctors) temporarily in another member state.
Service Receiver Movement: Receivers (e.g. patients, tourists, students) may move to another member state.
Service Movement: Services can be provided online (e.g. internet gambling) without physical movement of providers/receivers.
Significant Case Law
Open Investments Case (1993)
Dutch Ministry of Finance prohibited unsolicited calls for financial services without prior client approval.
Court of Justice ruled that Article 56 covers services offered by phone from one member state to receivers in others.
Louisa Carboni Case (1998)
Two Italians fined for currency regulations while traveling for medical treatment.
Court ruled freedom to receive services is a necessary part of the right to provide services, including medical treatment and education.
Implications for Turkish Nationals
Turkish nationals' rights under agreements differ. Turkish tourists may not receive the same free movement rights as EU citizens.
Definitions According to Article 57
Service Elements:
Service
Remuneration
Temporary nature of the service.
Examples of services: educational, health care, tourism, transmission of signals, and sports activities as expanded by case law.
Rights of Service Providers and Receivers
Rights of Entry and Residence
Governed by the Citizens’ Rights Directive for service providers in another member state for less than three months.
Long-term stays rely on treaty provisions.
Right of entry includes individuals, companies, and their workforce (may include third-country nationals under certain conditions).
Right of Access to Market
Article 57 prohibits discrimination against service providers and receivers based on nationality.
Article 56 prohibits direct discrimination based on place of establishment.
Indistinctly applicable measures (e.g. additional burdens on foreign service providers) are also prohibited unless justifiable by public interests.
Example: Commission vs. Germany: German insurance requirements were found to breach Articles 56 and 57, as they increased costs for foreign companies.
Conclusion
Understanding the nuances of free movement of services is critical for compliance and strategic operation within the EU.
Relevant case law plays a significant role in interpreting these rights.