free provision of services. agenda part i introduction challenges for turkish companies european...

Free Provision of Services

Agenda

Part I Introduction Challenges for Turkish companies European legal framework

Part II Tackling internal market barriers Case studies

Introduction

Gross value added - EU 27

2%

20%

78%

Agriculture, hunting fishingIndustryServices, incl. construction

Source: EUROSTAT, OECD

Gross value added - Turkey

9%

22%

70%

Agriculture, hunting fishingIndustryServices, incl. construction

Source: EUROSTAT, OECD

Employment - EU 27

5%

27%

68%

Agriculture, hunting fishing

Industry

Services, incl. construction

Source: EUROSTAT, OECD

Employment - Turkey

26%

26%

48%

Agriculture, hunting fishingIndustryServices

Source: EUROSTAT, OECD

World Trade

World Exports

1980

World Exports

2008

World Imports

1980

World Imports 2008

0

5

10

15

20

25

0.43.7

0.43.52

16

2.1

16.4Spalte1Goods

Trillion USD

Source: WTO Trade Statistics

World Trade

Turkey Exports

1980

Turkey Exports

2008

Turkey Imports

1980

Turkey Imports 2008

0

50

100

150

200

250

0.634.4

0.5 16.12.9

132

7.9

202Spalte1Goods

Billion USD

Source: WTO Trade Statistics

Challenges for Turkey

State of play

Accession negotiations started in October 2005

Screening completed

Important alignment needs Introduce freedom to provide services Right of establishment Mutual recognition of professional qualifications

Chapter suspended in December 2006

European Legal Framework

Internal Market

Area without internal borders in which thefree movement of goods, persons, servicesand capital is ensured in accordance with

ECTreaty (Art 14 EC Treaty)

Basics

Services can be provided...

On a temporary basis - Freedom to provide services (Art 49 et seqq ECT)

Stable continuous manner – Freedom of establishment (Art 43 et seqq ECT)

No general time limit

Case by case decision taking into account duration, regularity, periodicity and continuity

Basics

Cross border element needed

Precedence of Community law

Direct effect

Limits for public authorities and to some extend (collective) private action

State liability

Freedom to provide services

Restrictions on freedom to provide services within the Community are prohibited (Art 49 EC Treaty)

Beneficiary Service provider - EU-national established in

Community Service recipient – EU-national OR EU-resident Service itself

Service within the meaning of the EC Treaty

Cross border activity not covered by other freedom Posting of workers is covered by provision of services

Provided for remuneration (recipient/third party)

Temporary basis/absence of a stable and continuous participation in the host MS

V

VV

Freedom to provide services

Foreigners to be treated as nationals - no discrimination e.g. nationality, residence, language requirements

Abolition of any national restriction National measure liable to prohibit, impede or render

less advantageous the provision of a service (delays, additional costs)

Even if no discrimination between nationals and foreigners

Prohibited restrictions

Bans (e.g. gambling) Obligation to have permanent

establishment/residence Requirement to obtain authorisation/registration Ban on setting up infrastructure (office, chamber) Minimum number of employees Compulsory registration/membership with

professional body More advantageous terms/prices for residents

Freedom of establishment

Restrictions on freedom of establishment are prohibited (Art 43 EC Treaty)

Carry on an economic activity in a stable and

continuous manner in other MS

Right to open agencies, branches or subsidiaries

Right to set up and manage undertakings

Right to take up and pursue self-employed activities

Freedom of establishment

Beneficiary EU nationals Companies/firms formed in accordance with law

of a MS and having registered office/central administration/principal place of business within Community

Freedom of establishment

Foreigners to be treated as nationals - no discrimination e.g. nationality, residence, language requirements,

economic need tests

Abolition of any national restriction National measure liable to prohibit, impede or render

less advantageous the provision of a service (delays, additional costs)

Even if no discrimination between nationals and foreigners

Prohibited restrictions

Prohibition to have an establishment in more than one MS

Restrictions to choose between principal/secondary establishment

Involvement of competitors in authorisation decisions

Insurance from national company Quanatitative restrictions Specific legal form One office rule Minimum number of employees

Grounds for justification I

Activities directly/specifically connected with the exercise of official authority (Art 45 ECT)

Grounds of public policy, public security or public health (Art 46 ECT)

May justify (non) discriminatory restrictions

Grounds for justification II

Imperative requirements in the general interest (ECJ) e.g. consumer protection, protection of workers, road

safety, environmental protection, financial balance of of health system

No harmonisation Suitable for securing overriding requirements relating

to public interest Not go beyond what is necessary (provision of

services vs. establishment)

May justify only non-discriminatory restrictions

Recognition of Professional Qualifications

Recognition of Professional Qualifications

MS free to require qualifications

Qualifications acquired in other MS have to be recognised

Directive 2005/36/EC

Different requirements for Service provision (temporary and occasional) Establishment (permanent business)

Recognition of Professional Qualifications

Service Provision: profession regulated in home MS: immediate

service provision

profession not regulated in home MS: 2 years experience during precedent 10 years needed

public health and safety implications: additional checks/requirements possible

Recognition of Professional QualificationsService Provision

Written declaration in advance may be required

Documents needed: Proof of nationality and legal establishment in MS to

legally pursue activity Evidence of professional qualification/2 years

experience

No registration with or membership of professional organisation, excepted pro forma membership

No registration with public social security body

Recognition of Professional Qualifications

Establishment: General system: mutual recognition of

diplomas, certificates, attestations; aptitude tests and adaptation periods possible

Recognition of experience: most crafts and trade professions covered; proof of experience and training leads to recognition

Specific automatic recognition: medical professions

Everything is perfect?

Many problems/obstacles remain

Internal Market in services is key for Lisbon Agenda

Only 20% of trade in the Internal Market

Services Directive

Objectives

Establish a genuine Internal Market in Services

Legal Security

Economic Growth and Job Creation

No liberalisation of SGEI, no privatisation of public entities

Scope I

“All” services covered

Directive does not cover: Non-economic services of general interest, financial services,electronic communications services, transport services,

temporarywork agencies, healthcare services, audiovisual services,

gambling,official authority, social services, private security services,

notaries,taxation

Scope II

Private International Law unchanged

Labour Law (Posting of Workers Directive) unchanged Compliance with core conditions of work of the host MS Prior notification of posting may be required

Recognition of professional qualifications unchanged

Administrative Simplification

Simplification of procedures

Points of single contact Right to information Complete all procedures /formalities needed

Procedures by electronic means

Freedom of establishment

Permanent change to other MS Authorisation may be required, if:

Non discriminatory, necessary, proportionate Transparent and predictable criteria and procedures No duplication of requirements

Prohibited requirements e.g. Nationality, residence, economic need test

Requirements to be evaluated e.g. Quantitative/territorial restrictions, minimum number of

employees, fixed minimum and/or maximum tariffs

Free movement of services

Temporary and occasional work in other MS Country of origin principle changed into „principle

of non obstruction“ Requirements only if

Non-discrimination Necessity (public policy/security/health, environment) Proportionality Safeguard clause

Black list (e.g. establishment, authorisation, ban on infrastructure, equipment)

Screening

Limited Harmonisation

Information obligations on providers (name, contact details, authorisation, after-sales guarantee, price/main features of the service,…)

Professional liability insurance and guarantees

Measures to promote service quality (certification, quality charter, standards, settlement of disputes)

Administrative cooperation

Obligation to cooperate

Information exchange and mutual assistance

Supervision by MS best placed

Internal Market Information System

The Directive is …

No revolution Social, labour, environmental standards

maintained and quality secured

Value Added – less bureaucracy, less barriers, more legal security

Unsolved

Enforcement of administrative decisions Control measures for posted workers

Tackling internal market barriers

Content

1. Introduction

2. Tools to fight internal market problems

3. Conclusions

Introduction

99,6% of WKÖ members are SMEs

89,8% of WKÖ members are micro enterprises

59% Export Quota

EU market is essential for Austria and its SMEs

Introduction

Well functioning of Internal Market priority for WKÖ Lobbying (Services Directive, Mutual

Regonition,...) Support services for Members

Enterprise Europe Network within EU-Department Provides information, analysis and support about 290 requests/year related to Internal

Market some 50 Internal Market Problems

SMEs need fast, cheap and reliable solutions

Tools

Preventing Obstacles - Notification Procedure

Directive 98/34/EC MS have to notify draft technical regulations

relating to products and information society services before adoption

Technical regulation not notified cannot be applied

Commission and MS can examine draft during standstill periods

Business organisations can raise objections via EC/MS

Deatailed opinion extends of standstill period Solutions for 95% of cases

31. Kuala Lumpur32. Lagos33. Ljubljana34. Lisbon35. London36. Los Angeles37. Madrid38. Milan39. Manila40. Mexico41. Montreal42. Moscow43. Munich44. New Delhi45. New York

16. Casablanca17. Chicago18. Damascus19. Den Haag20. Dublin21. Frankfurt22. Helsinki23. Hong Kong24. Istanbul25. Jakarta26. Jeddah27. Johannesburg28. Cairo29. Kiev30. Copenhagen

1. Abu Dhabi 2. Algiers 3. Amman 4. Ankara 5. Athens 6. Bagdad 7. Bangkok 8. Barcelona 9. Belgrade10. Berlin 11. Brussels12. Budapest13. Buenos Aires14. Bucharest15. Caracas

46. Oslo47. Padua48. Paris49. Peking50. Prague51. Bratislava52. Santiago53. Sao Paulo54. Sarajevo55. Seoul56. Shanghai

57. Singapore58. Sofia59. Stockholm60. Strasbourg61. Sydney62. Taipei63. Teheran64. Tel Aviv65. Tokyo66. Toronto67. Tripoli68. Warsaw69. Zagreb70. Zürich

Austrian Trade Commissions

Foreign Trade Commissions – Bilateral Interventions

SOLVIT

Incorrect application of EU rules by MSadministration causing roblems for EU citizens with cross border element

Network of 30 SOLVIT centres (EEA)

Informal and pragmatic approach – no legal obligation to find solution

Free of charge

10 weeks deadline

SOLVIT

National authority Citizen or company

HomeSOLVIT centre

Lead SOLVIT centre

Negotiate possible solutions

Co-operate to find the solution

Define problem and discuss the solution

Country A Country B

How does it work?

SOLVIT

Tackle Internal Market Barriers

Trade Commissions

SOLVIT

Infringement Procedures

Interactive Policy Making (SME Panels, SME feedback)

Parliamentary Questions

To increase pressure

Written questions may be put by any Member to the Council or Commission

Answered within six weeks non-priority)/ three weeks (priority)

Infringement Procedure

Lodge complaint with EC if MS violates EC-law

EC may open infringement procedure and bring case before ECJ

MS obliged to comply with ECJ ruling

Procedure may take several years

Conclusions

SME stronger affected by internal market barriers

Business Organisation‘s support helpful and needed

Existing tools are valuable but not perfect

Thank you!

Markus StockAustrian Federal Economic Chambermarkus.stock@wko.at