European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Access to an activity of services or its performance may be subject to restrictions. However, Article 16 restates that the principle of freedom to provide services requires each Member State to respect the right of providers to provide service in the territory of a Member State other than the one in which they are established and to ensure free access to and free exercise of a service activity wit …

Derogations and limits

Access to an activity of services or its performance may be subject to restrictions. However, Article 16 restates that the principle of freedom to provide services requires each Member State to respect the right of providers to provide service in the territory of a Member State other than the one in which they are established and to ensure free access to and free exercise of a service activity within its territory. 

Article 16 therefore prohibits Member States from making the freedom to provide services subject to requirements which are not justified by the reasons it lists in paragraphs 1 and 3. According to paragraph 1, which repeats the conditions laid down by the Court of Justice, in order to be accepted, the restriction must be applied in a non-discriminatory manner , necessary to protect the general interest  and not disproportionate in relation to the objective sought . 

Paragraph 2 lists a series of requirements that a Member State cannot, in principle, impose on the provider or recipient of a service such as: the obligation to have an establishment in the territory where the service is provided , or to obtain an authorization or registration ; a ban on the provider setting up a certain form or type of infrastructure , an obligation on the provider to possess a specific identity document  or, for the provider and the recipient, the obligation to adopt specific contractual arrangements which prevent or restrict service provision by the self-employed , or, lastly, requirements affecting the use of equipment and material. Given the structure of the directive, those restrictions should be able to be justified by one of the four objectives of general interest listed in paragraph 3 . Article 16(3) does offer Member States the possibility to impose restrictions with regard to the provision of a service activity, where they are justified for reasons of public policy, public security, public health or the protection of the environment. Thus, the financing of social actions or welfare is not a ground that may be regarded as an objective justification for restrictions of the freedom to provide services within the meaning of the directive .  However, according to the Commission's Handbook on the implementation of the Services Directive, those exceptions do not apply to the list set out in paragraph 2 insofar as such discriminatory requirements, which have already been found to be incompatible by the Court of Justice, are never likely to be justified as they will be disproportionate . 

The freedom to provide services involves additional derogations which cover, inter alia, services of general economic interest, such as the postal sector and the electricity and gas sectors, or the requirements in force in the Member State where the service is provided which reserve an activity to a particular profession , to which Article 16 does not apply (Art. 17) , or individual measures relating to the safety of services justified by exceptional circumstances (Art. 18) .

"the requirement may be neither directly nor indirectly discriminatory with regard to nationality or, in the case of legal persons, with regard to the Member State in which they are established".

"the requirement must be justified for reasons of public policy, public security, public health or the protection of the environment".

See Handbook on implementation of the Services Directive, pt 7.1.3.4.

Case C-342/14 X-Steuerberatungsgesellschaft v Finanzamt Hannover-Nord, Judgment of 17 December 2015, LawLex201500001761JBJ.

Additional derogations from the freedom to provide services apply: 1) to services of general economic interest which are provided in another Member State, inter alia:

a) in the postal sector, services covered by Directive No 97/67/EC of the European Parliament and of the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service;

b) in the electricity sector, services covered by Directive No 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity;

c) in the gas sector, services covered by Directive No 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas;

d) water distribution and supply services and waste water services;

2) matters covered by Directive No 96/71/EC;

3) matters covered by Directive No 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data;

4) matters covered by Council Directive No 77/249/EEC of 22 March 1977to facilitate the effective exercise by lawyers of freedom to provide services ;

5) the activity of judicial recovery of debts;

6) matters covered by Title II of Directive No 2005/36/EC, as well as requirements in the Member State where the service is provided which reserve an activity to a particular profession;

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

8) as regards administrative formalities concerning the free movement of persons and their residence, matters covered by the provisions of Directive No 2004/38/EC that lay down administrative formalities of the competent authorities of the Member State where the service is provided with which beneficiaries must comply;

9) as regards third country nationals who move to another Member State in the context of the provision of a service, the possibility for Member States to require visa or residence permits for third country nationals who are not covered by the mutual recognition regime provided for in Article 21 of the Convention implementing the Schengen Agreement of 14 June 1985 on the gradual abolition of checks at the common borders or the possibility to oblige third country nationals to report to the competent authorities of the Member State in which the service is provided on or after their entry;

10) as regards the shipment of waste, matters covered by Council Regulation (EEC) No 259/93 of 1 February 1993 on the supervision and control of shipments of waste within, into and out of the European Community;

11) copyright, neighboring rights and rights covered by Council Directive No 87/54/EEC of 16 December 1986 on the legal protection of topographies of semiconductor products and by Directive No 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases, as well as industrial property rights;

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

13) matters covered by Directive No 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audit of annual accounts and consolidated accounts;

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

15) provisions regarding contractual and non-contractual obligations, including the form of contracts, determined pursuant to the rules of private international law.

According to Article 18(1), "By way of derogation from Article 16, and in exceptional circumstances only, a Member State may, in respect of a provider established in another Member State, take measures relating to the safety of services " where several conditions are met: "the national provisions in accordance with which the measure is taken have not been subject to Community harmonization in the field of the safety of services"; "the measures provide for a higher level of protection of the recipient than would be the case in a measure taken by the Member State of establishment in accordance with its national provisions"; "the Member State of establishment has not taken any measures or has taken measures which are insufficient"; "the measures are proportionate".

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

Case C-279/00 Commission v Italy [2002] ECR I-1425, LawLex200900001370JBJ.

Case C-264/99 Commission v Italy [2000] ECR I-4417, LawLex200700001619JBJ.

Case C-55/94 Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di Milano [1995] ECR I-4165, LawLex200900001056JBJ.

Case C-355/98 Commission v Belgium [2000] ECR I-1221, LawLex200700001630JBJ.

Case C-398/95 Syndesmos ton en Elladi Touristikon kai Taxidiotikon Grafeion v Ypourgos Ergasias [1997] ECR I-3091, LawLex200900000676JBJ.

According to Article 16(3), "The Member State to which the provider moves shall not be prevented from imposing requirements with regard to the provision of a service activity, where they are justified for reasons of public policy, public security, public health or the protection of the environment and in accordance with paragraph 1".

Case C-179/14 Commission v Hungary, Judgment of 23 February 2016, LawLex201600000389JBJ.

European Business Law

113. Derogations and limits

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

113. Derogations and limits

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise