Saturday, 12 April 2008

EU TFEU: Scope of services

The European Court of Justice (ECJ) has done much to give meaning to the treaty provisions regarding the right to provide (and to receive) cross-border services within the European Community (European Union).

By preserving the treaty rules, the Treaty of Lisbon upholds the benefits of the internal market to both service providers and receivers of services.

We look at a short reform history of Article 50 of the Treaty establishing the European Community, with examples of services, and we suggest further reading for the ones who want to explore the context.

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The Treaty of Lisbon (ToL) makes the briefest mention of Article 50 of the Treaty establishing the European Community (TEC). The only express amendment, in OJ 17.12.2007 C 306/55 is the following:

57) In Article 50, third paragraph, the words ‘the State’ shall be replaced by ‘the Member State’.

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The surrounding provision is found in the latest consolidated version of the treaties, the current TEU and TEC, in the Official Journal (OJ 29.12.2006 C 321 E/62):

Article 50 TEC

Services shall be considered to be ‘services’ within the meaning of this Treaty where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons.

‘Services’ shall in particular include:

(a) activities of an industrial character;

(b) activities of a commercial character;

(c) activities of craftsmen;

(d) activities of the professions.

Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the State where the service is provided, under the same conditions as are imposed by that State on its own nationals.

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If the Lisbon Treaty enters into force, the provision should exist in the following context, with the express and horizontal amendments as well as renumbering concerning the Treaty on the Functioning of the European Union (TFEU):

Part Three ‘Policies and internal actions of the Union’

Title III (renumbered Title IV) ‘Free movement of persons, services and capital’

Chapter 3 ‘Services’

Article 50 TFEU (ToL), renumbered Article 57 TFEU

Services shall be considered to be ‘services’ within the meaning of the Treaties where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons.

‘Services’ shall in particular include:

(a) activities of an industrial character;

(b) activities of a commercial character;

(c) activities of craftsmen;

(d) activities of the professions.

Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the Member State where the service is provided, under the same conditions as are imposed by that State on its own nationals.

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Article III-30 of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/33) and Article III-145 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/63) differ so little from the current and future provision that it is there is no need to repeat them here.

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The UK FCO’s ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command paper 7311) concludes, quite correctly, that Article 57 TFEU (Article 50 ToL) is:

“In substance the same as Article 50 TEC.”

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Yesterday’s post ‘EU TFEU: Freedom to provide services’ looked at the drafting history of Article 49 TEC and ToL (renumbered Article 56 TFEU) and suggested a number of web resources for further study.

Today, we recommend a book text on the substantive EU law on services:

Josephine Steiner, Lorna Woods and Christian Twigg-Flesner: EU Law Ninth Edition (Oxford University Press, 2006), Chapter 22 ‘Freedom to provide services; freedom to receive services’ (page 468 to 493), which describes the evolution of ECJ jurisprudence on services.

With the marginal changes of the Lisbon Treaty (not yet in force) readers can rely on the text concerning the treaty provisions, but since publication the so called Services Directive was finally enacted.

Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market, OJ 27.12.2006 L 376, p. 36–68:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:376:0036:0068:EN:PDF

The Service Directive, addressed to the member states, has entered into force, but they have time until 28 December 2009 to transpose its provisions.

The Service Directive is much less distinguished by the quality of its contents than by the collective sigh of relief generated by the fact that it was enacted at all, having become one of the spectres haunting the French referendum debate on the Constitutional Treaty in 2005.

For the sake of fairness, a more upbeat view is presented by the UK Department for Business, Enterprise and Regulatory Reform (BERR) in its 5 November 2007 consultation paper ‘Implementing the Services Directive, Consultation Document on Implementing the EU Services Directive in the UK’, where Gareth Thomas MP, Parliamentary Under Secretary of State for Trade and Consumer Affairs, said (page 3):

“I believe the Service Directive is a genuinely market-opening measure that will bring real benefits to the UK.”

See:

http://www.berr.gov.uk/files/file42207.pdf


Ralf Grahn