Services Directive: Quick Guide
What is the scope of the Services Directive?The Services Directive helps businesses set up?Cross-border provision of services?The rights of service recipients?Administrave cooperation
Subject to a few exceptions, the Services Directive applies to the provision of a wide ranging amount of services involving private individuals and businesses. For example, it covers:
- distributive trades (including retail and wholesale goods and services)
- the activities of most regulated professions (such as legal and tax advisers, architects, engineers, accountants, surveyors)
- construction services and crafts
- business-related services (such as office maintenance, management consultancy, event organisation, debt recovery, advertising and recruitment services)
- tourism services (e.g. travel agents)
- leisure services (e.g. sports centres and amusement parks)
- installation and maintenance of equipment
- information society services (e.g. publishing - print and web, news agencies, computer programming)
- accommodation and food services (including hotels, restaurants and caterers)
- training and education services
- rentals and leasing services (including car rentals)
- real estate services
- household support services (such as cleaning, gardening and private nannies).
The following services are explicitly excluded under the Services Directive:
- financial services
- electronic communication services with respect to matters covered by other community instruments
- transport services falling into Title V of the EC Treaty
- healthcare services provided by healthcare professionals to patients, including assessing, maintaining or restoring their state of health where those activities are reserved to a regulated health profession
- temporary work agencies' services
- private security services
- audiovisual services
- certain social services provided by the State, providers mandated by the State or by charities recognised as such by the State
- services provided by notaries and bailiffs (appointed by an official act of government).
However, national rules and regulations pertaining to these excluded services will still have to comply other rules of Community law, in particular with the freedom of establishment and the freedom to provide services as guaranteed in the Treaty on the Functioning of the European Union.
The Services Directive requires Member States to simplify procedures and formalities that service providers need to comply with. Thus, this will not only facilitate the establishment of businesses in other Member States, but it will also be of benefit to those providers who wish to establish operations in their own Member State. In particular, the Directive requires that some very specific obligations be established by the Directive:
- it requires Member States to set up "points of single contact", i.e. one entity through which service providers can obtain all the requisite information and complete all procedures relating to their activities.
- it requires Member States to ensure that all these procedures and formalities can be completed at a distance and by electronic means.
- it obliges Member States to review and evaluate all their authorisation schemes concerning access to a service activity or the exercise thereof and abolish them or replace them by less restrictive means, such as simple declarations, where they are unnecessary or otherwise disproportionate. Any remaining schemes are to be made clearer and more transparent. Thus, for example conditions have to be made in advance and in public and must be clear and non-discriminatory. Moreover, authorisations have to be in principle granted for an indefinite period and be valid throughout the national territory.
- it requires Member States to abolish discriminatory requirements, such as nationality or residency requirements, and other particularly restrictive requirements, such as "economic needs" tests which require businesses to prove to the authorities that there is a demand for their services. It also requires the review of other burdensome requirements which may not always be justified, such as territorial restrictions or the minimum number of employees required.
The Services Directive aims at improving the regulatory environment for service providers who want to supply their services across borders to other Member States, without setting up an establishment there. In this respect, the Services Directive lays down the "freedom to provide services" clause whereby Member States should, in principle, not impose their national requirements or other restrictions on incoming service providers. However, certain requirements can still be imposed under very limited circumstances, so long as they are non-discriminatory or justified for reasons of public policy, public security, public health or the protection of the environment and do not go beyond what is necessary in order to achieve their objective.
Furthermore, the "freedom to provide services" clause is also associated with a number of general derogations. These include, among other, matters covered by the Posting of Workers Directive 96/71/EC and matters covered by Title II of Directive 2005/36/EC on the recognition of professional qualifications.
In those instances where Member States are still allowed to impose restrictions on incoming service providers, the service providers involved should be able to obtain all relevant information and complete all procedures and formalities through the "points of single contact", at a distance and by electronic means.
The concept of "recipient" not only covers consumers but also businesses who want to use services in the course of their activities. To enhance the rights of recipients and strengthen their confidence in the internal market, the Services Directive requires Member States to:
- remove obstacles for recipients wanting to use services supplied by providers established in other Member States, such as obligations to obtain an authorisation.
- abolish discriminatory requirements based on the recipient's nationality or place of residence. This non-discrimination obligation has to be complied with by the Member States' public administrations, that is the State or regional or local authorities.
- make available to recipients general information and assistance on the legal requirements, in particular consumer protection rules, and redress procedures applicable in other Member States.
List of bodies designated by the Member States to provide information and assistance to service recipients who wish to receive services from providers based in other Member States ("List of Article 21 bodies").
The Services Directive obliges Member States to cooperate with each other, as well as offer mutual assistance where needed. This should ensure the effective supervision of service providers whilst at the same time providing that such supervision does not lead to additional or unjustified obstacles for service providers.
Under the Directive, the competent authorities of different Member States have to exchange information with each other, as well as carry out checks, inspections and investigations upon request. They also have to send an alert to other Member States in cases relating to a service activity that could cause serious damage to the health or safety of persons or to the environment. For this purpose the Commission in cooperation with Member States has established an electronic system for the exchange of information (IMI).