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Free Provision of Services
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Agenda
Part I Introduction Challenges for Turkish companies European legal framework
Part II Tackling internal market barriers Case studies
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Introduction
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Gross value added - EU 27
2%
20%
78%
Agriculture, hunting fishingIndustryServices, incl. construction
Source: EUROSTAT, OECD
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Gross value added - Turkey
9%
22%
70%
Agriculture, hunting fishingIndustryServices, incl. construction
Source: EUROSTAT, OECD
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Employment - EU 27
5%
27%
68%
Agriculture, hunting fishing
Industry
Services, incl. construction
Source: EUROSTAT, OECD
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Employment - Turkey
26%
26%
48%
Agriculture, hunting fishingIndustryServices
Source: EUROSTAT, OECD
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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
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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
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Challenges for Turkey
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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
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European Legal Framework
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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)
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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
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Basics
Cross border element needed
Precedence of Community law
Direct effect
Limits for public authorities and to some extend (collective) private action
State liability
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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
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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
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V
VV
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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
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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
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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
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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
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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
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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
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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
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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
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Recognition of Professional Qualifications
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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)
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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
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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
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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
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Everything is perfect?
Many problems/obstacles remain
Internal Market in services is key for Lisbon Agenda
Only 20% of trade in the Internal Market
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Services Directive
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Objectives
Establish a genuine Internal Market in Services
Legal Security
Economic Growth and Job Creation
No liberalisation of SGEI, no privatisation of public entities
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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
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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
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Administrative Simplification
Simplification of procedures
Points of single contact Right to information Complete all procedures /formalities needed
Procedures by electronic means
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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
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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
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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)
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Administrative cooperation
Obligation to cooperate
Information exchange and mutual assistance
Supervision by MS best placed
Internal Market Information System
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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
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Tackling internal market barriers
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Content
1. Introduction
2. Tools to fight internal market problems
3. Conclusions
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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
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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
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Tools
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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
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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
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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
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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?
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SOLVIT
Tackle Internal Market Barriers
Trade Commissions
SOLVIT
Infringement Procedures
Interactive Policy Making (SME Panels, SME feedback)
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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)
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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
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Conclusions
SME stronger affected by internal market barriers
Business Organisation‘s support helpful and needed
Existing tools are valuable but not perfect