#5843 - Free Movement Of Services And Freedom Of Establishment - Irish European Union Law

Free Movement of Services

Article 49 restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than of the person for whom the services are intended.

Article 50 Services shall be considered to be services within the meaning of this Treaty where they are normally provided for remuneration insofar as they are not governed by the provisions relating to freedom of movement for goods, capital and persons

In particular they include A) activities of an industrial character, B) activities of a commercial character, C) activities of craftsmen and D) activities of the professions

Directive 2006/123

Article 9 Authorisation schemes must not be arbitrary, must be necessary in the public interest and employ the least restrictive means available

Article 10 A scheme is not arbitrary if it is unambiguous, its criteria are known in advance and it is transparent and accessible

Van Binsbergen (ECJ 1974)

Facts

• The reference arose from a case where a qualified Dutch lawyer challenged the failure of the Dutch authorities to allow him act as a legal representative on the grounds that he was not established in the Netherlands.

Issue

• Free movement of services – Direct Effect

Judgment

• As regards the abolition of discrimination on the basis of nationality or residence in respect of the provision of services, the relevant Articles of the Treaty impose a well-defined obligation, the fulfillment of which would become jeopardised if it were found not to have direct effect.

Inter-State element required

Case 52/79, Debauve [1980] ECR 833

• Belgian rules prohibited advertising on television or radio.

• A case was taken against cable companies who broadcast foreign tv stations without excising their advertisements.

• As this involves regulation of national broadcasters, the rules are permissible, so long as they are applied without discrimination to broadcasters of national and foreign programming.

Freedom to receive services

Case 186/87, Cowan [1989] ECR 195

• State compensation scheme for victims of assault

• Limited to French nationals

• Held, the freedom to go to another member state implies that one will have the same level of protection on the same basis as the nationals of that member state. Compensation services such as this must be available to all nationals of all member states

SPUC v Grogan (ECJ 1991)

Facts

• The reference arose out of a case where the applicants challenged the provision of information about abortion services abroad by a number of Students' Unions.

Issue

• Free movement of services – Abortion – Distribution of information

Judgment

• As a professional activity carried out in exchange for remuneration abortion must be considered as service – questions of morality are not relevant to the assessment.

• The distribution of information, carried out independently by groups not formally associated with the service providers, is not protected by Articles 49 & 50.

Schindler (ECJ 1994)

Facts

• The reference arose out of a case where the organisers of a German lottery challenged the prohibition on their advertising it in Britain.

Issue

• Lotteries – Prohibition on advertisement – Justifiable restrictions

Judgment

• The lotteries in question are cross-border services, which allow customers to engage in a game of chance in the hope of winning money, in exchange for remuneration.

• As lotteries are legal and commonplace across a number of member states, the court cannot refuse to apply the relevant Articles of the Treaty on the grounds that they may be of questionable moral value.

• National legislation may fall within the ambit of Article 50 where it is applied without distinction, if it is liable to impede or prohibit the activities of a provider of services legally established in another member state.

• However, the restrictions in issue are justified: A) most Member States have restrictions to ensure that lotteries are not run for private profit, B) there is a high risk of crime or fraud attaching to them, C) there are damaging social consequences in that they may encourage gambling and D) they can play a useful role in furthering public interest activities if controlled properly.

• These considerations counsel giving a wide latitude to member states in controlling lotteries.

Humbel (ECJ 1988)

Facts

• The reference arose out of a case where a number of French nationals sought a refund of fees paid for their son's secondary education in Belgium, which were levied on the basis that the applicants were not Belgian.

Issue

• Public education

Judgment

• There is no remuneration in exchange for the provision of public education, the State is not running it for profit but in the fulfillment of its duties towards its population and it is paid for from the public purse – thus it is not a service.

Kohll (ECJ 1998)

Facts

• The reference arose out of a case where a Luxembourgish national challenged the refusal of his insurer, in accordance with national legislation, to allow his daughter to undergo orthodontic treatment in Germany.

Issue

• Social security – Restrictions – Justification

Judgment

• Such an activity, carried out outside any hospital infrastructure and provided for in exchange for remuneration must be considered a service.

• As the legislation requires prior authorisation for reimbursement for services obtained abroad but not at home, it deters people from seeking services in other member states and is a restriction on the freedom of provision of services.

• The risk of serious financial imbalance in the social security scheme may be a general interest constituting an objective justification for the prior authorisation scheme – in this case however, there is no evidence that abolition of the scheme would create such an imbalance.

• While the free movement of services may be curtailed in the interests of public health – however, as several coordinating pieces of Community legislation have sought to harmonise the conditions of admission to the professions of doctor or dentist, this cannot be grounds for restrictions such as the one in issue.

Geraet-Smits (ECJ 2001)

Facts

• The reference arose out of a case where a Dutch national challenged the failure of the Dutch national insurance scheme to reimburse her for treatment which she underwent in Germany.

Issue

• Social security – prior authorisation - justifications

Judgment

• Medical activities in general are protected as services, regardless of whether they are paid privately or by social security schemes – in either case there is remuneration.

• The nature of the authorisation procedure means that there will be a great many cases where authorisation is refused – as such it deters and even prevents people from going abroad for medical treatment and constitutes a restriction on the free movement of services.

• The need to maintain a social security system's financial balance as well as the need to ensure a scheme which provides a balanced medical and hospital service open to all may constitute objective justifications – as the Dutch system operates by contracting with specific hospitals so as to ensure the level of planning necessary to run a health , the authorisation system for non-contracting hospitals is necessary to control costs and ensure a high level of care.

• The requirement that medical care be 'considered normal in the relevant professional circles' to be authorised must be based on international opinion.

• The requirement that the treatment in question be 'necessary' for the partient's state of health is permissible, provided it allows refusal only where equally effective care can be obtained without undue delay by a contracted healthcare provider.

Watts (ECJ 2006)

Facts

• The reference arose out of a case where a UK national challenged the failure of the NHS to reimburse him for medical treatment obtained in France.

Issue

• Social security – Prior authorisation – Justification

Judgment

• A medical service provided in exchange for remuneration is a service protected by the Treaties.

• Article 49 precludes making it more difficult to provide services between member states than purely within a member state – the prior authorisation procedure for healthcare in foreign hospitals is thus contrary to Article 49.

• Such restrictions may be justified in order to prevent a financial imbalance in the scheme, to ensure a balanced medical service open to all and the maintenance of treatment capacity and medical competence in the national territory.

• The prior authorisation scheme is necessary in order to maintain standards of medical care and control costs.

• Such a scheme however must meet the requirements of proportionality and must be based on objective, non-discriminatory criteria which are set out in advance – in this case there is an absence of such criteria and the scheme is not compatible with the Treaty.

Freedom of Establishment

Article 43EC (ex 52)

• restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited.

• Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings...under the conditions laid down for its own nationals by the law of the country where such establishment is effected.

Article 48 (ex 58)

• Companies or firms formed in accordance with the laws of a Member State and having their registered office, central...