Podcast
Questions and Answers
What does the broad test regarding national restrictions imply?
What does the broad test regarding national restrictions imply?
What does freedom of establishment ensure regarding new branches or companies?
What does freedom of establishment ensure regarding new branches or companies?
Which legal theory suggests a company is governed by the laws of its incorporation state?
Which legal theory suggests a company is governed by the laws of its incorporation state?
How have courts limited the effects of the broad test?
How have courts limited the effects of the broad test?
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What is implied by the need to strike a balance when applying national laws?
What is implied by the need to strike a balance when applying national laws?
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What is the primary establishment right under Article 49?
What is the primary establishment right under Article 49?
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Which article outlines the freedom to travel cross-border to receive services?
Which article outlines the freedom to travel cross-border to receive services?
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According to Article 57 TFEU, which of the following is explicitly covered as a service?
According to Article 57 TFEU, which of the following is explicitly covered as a service?
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What is a characteristic of secondary establishment under Article 49?
What is a characteristic of secondary establishment under Article 49?
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Which provision addresses the services where neither provider nor recipient travels, as per case law?
Which provision addresses the services where neither provider nor recipient travels, as per case law?
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What establishes that there are purely internal situations regarding services and establishment in EU law?
What establishes that there are purely internal situations regarding services and establishment in EU law?
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Which statement is true regarding the economic activity required to engage Articles 49 and 56 TFEU?
Which statement is true regarding the economic activity required to engage Articles 49 and 56 TFEU?
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What does the concept of 'Reverse Discrimination' refer to within EU law related to establishment?
What does the concept of 'Reverse Discrimination' refer to within EU law related to establishment?
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What must member states bear in mind despite their freedom to act in economic matters?
What must member states bear in mind despite their freedom to act in economic matters?
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How does the Carpenter case inform about the needed movement for EU law applicability?
How does the Carpenter case inform about the needed movement for EU law applicability?
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What does the CJEU's refusal to recognize an unrestricted right to transfer management imply for national restrictions?
What does the CJEU's refusal to recognize an unrestricted right to transfer management imply for national restrictions?
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In the context of EU law, what condition applies to the Daily Mail ruling regarding company status?
In the context of EU law, what condition applies to the Daily Mail ruling regarding company status?
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What can be a consequence of higher taxes for companies in relation to the freedom of establishment?
What can be a consequence of higher taxes for companies in relation to the freedom of establishment?
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What legal principle did ACT Group Litigation and FII (No 1) reflect in relation to taxation?
What legal principle did ACT Group Litigation and FII (No 1) reflect in relation to taxation?
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What is a potential implication of the Cartesio ruling regarding company reincorporation?
What is a potential implication of the Cartesio ruling regarding company reincorporation?
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Study Notes
Freedom of Establishment and Services
- The presentation covers EU internal market law, focusing on freedom of establishment and services.
- Students will learn key concepts, legal provisions, and landmark cases.
- The goal is to equip students to advise clients on EU internal market matters related to the four freedoms.
Learning Goals
- Students need to identify and analyze key concepts, legal provisions, and CJEU landmark cases related to EU internal market law.
- Students will learn about freedom of establishment.
- Students will learn about free movement of services.
- Students will learn about secondary legislation regarding these freedoms.
Framework
- The area of law for Services and Establishment is parallel and overlapping.
- Secondary legislation often covers similar concepts to Treaties.
- Treaty rights apply when secondary legislation doesn't.
- Secondary legislation is limited in its scope.
Main Pieces of Law
- Article 49-62 TFEU provides a framework for establishment and services.
- Article 49 outlines freedom of establishment.
- Article 56 details free movement of services.
- Directive 2006/123 (The Services Directive) is relevant legislation.
Overarching Structure of Treaty Rights
- The presentation outlines steps in determining if EU law applies in a given situation.
- Questions include: Does EU law apply? Which area of free movement law applies?
- Is there a breach of EU law by national restrictions?
- Are there justifications for national restrictions?
- Are restrictions proportional?
EU Law Application—Citizenship and Interstate Element
- EU citizenship or location requirements apply; these also apply to legal persons.
- Interstate element requires minimal movement for application.
- Walloon case presents purely internal situations for services and establishment, unlike cases regarding general citizenship.
EU Law Application—Economic Activity
- Engaging Articles 49 and 56 TFEU requires economic activity.
- Economic activity doesn't need to be for profit.
- The activity can't be provided for nothing.
EU Law Application—Scope
- Even if a member state is free to act, the four freedoms must be considered.
- The EU internal market remains a fundamental component of EU law.
Which Area of Free Movement Applies—Freedom of Establishment
- Article 49 deals with natural and legal persons establishing in other EU member states (primary establishment).
- Article 49 also covers agencies, branches, or subsidiaries (secondary establishment).
- Articles 54 and 55 specifically address companies.
Which Area of Free Movement Applies—Free Movement of Services
- Article 56 covers the freedom to provide and receive services across borders.
- Cross-border situations include both provider and recipient traveling (Alpine Investments).
Which Area of Free Movement Applies—Free Movement of Services (Continued)
- Article 57 partially defines what constitutes a service and provides examples.
- Transport, banking, and insurance services are mentioned separately.
- Services often rely on previous cases for establishing what is or isn't a service.
- Some overlap between establishment and services is possible.
Applying Services or Establishment
- Determining if services or establishment apply sometimes depends on whether something is being provided on a stable or continuous basis.
- Cases (e.g., Schnitzer) can indicate whether temporary services are involved, and infrastructure considerations may be pertinent.
- The Posted Workers Directive is relevant to workers moving between companies to provide services.
National Restriction Breach—Discrimination
- Discrimination based on nation or establishment in another state is prohibited (examples such as Factortame and Tax Credits).
- Indirect discrimination is similarly prohibited.
National Restriction Breach—Market Access
- A broad shift towards a market access-based approach is described.
- The approach begins with the Säger case, evolving through various cases.
- Language in these cases simplifies over time.
- Viking prohibited obstacles or restrictions to free movement.
- Application of this varies in relation to taxation and company incorporation.
National Restriction Breach—Market Access (Continued)
- Regulatory implications of broad tests exist.
- Legitimate public regulatory decisions often fall under these tests.
- Effects of free movement are considered by the Court in various ways.
- Court might exclude certain judgments if the effect on free movement is too uncertain or indirect.
National Restriction Breach—Incorporation
- Establishing a new branch or company is linked to freedom of establishment.
- Extensive secondary legislation exists regarding EU company law.
- National regulatory limits can affect this freedom of establishment.
- Issues with company balance considerations also exist.
National Restriction Breach—Incorporation (Continued)
- Two prevalent legal theories (real seat theory and incorporation theory) are discussed in relation to companies.
- These models are applied differently across various member states, generating case law.
- Daily Mail restricts the freedom to transfer company management if laws governing it remain the same.
- Cartesio explains restrictions for certain types of transfers.
- The concepts of Centros and broader jurisprudence are also mentioned.
National Restriction Breach—Taxation
- Taxation is a significant area affecting free movement.
- Higher taxes often disincentivize movement.
- Companies may challenge higher taxes, potentially resulting in selective application of EU law.
- Harmonization of tax legislation across EU countries is a consideration.
- Recent cases, like ACT Group Litigation and FII (No 1), indicate a shift toward discrimination based approaches for taxation issues.
National Restriction Breach—Horizontal Effect
- Most judgments are on actions from governments.
- Judgments may concern private actors' actions as well, with potentially problematic implications.
- Viking and Laval cases feature worker issues in strike action scenarios relating to internal market freedoms.
Justification for National Restrictions
- Directly discriminatory measures need explicit exemptions (like Article 52(1) for public policy, security, and health).
- Public service exception (Article 51) and specific connection with official authority are considered.
- Article 62 applies these justifications broadly.
Justification for National Restrictions—Public Interest
- Similar to other areas, non-discriminatory measures can be justified for objective public reasons (Gouda).
- Public interest justifications are relevant regarding services (Van Binsbergen).
- Specific examples for these justified measures are in several different areas, like financial markets, gambling, crime/fraud, and press pluralism.
Is the Restriction Proportional?
- A legitimate aim needs to be established.
- The restriction must be suitable for achieving that aim.
- The restriction cannot be more extensive than necessary.
- Often repeating case law is involved (gambling case law).
- Proportionality calculations are frequently in the case law details.
Is the Restriction Proportional? (Cont'd)
- Viking and Laval cases involved balancing fundamental rights (like collective action and striking) against EU freedoms.
- The cases involved a significant development.
- There are sometimes criticisms of judgments concerning possible labor rights violations.
- EU courts attempt to demonstrate a strong commitment to internal market freedoms, even when these clash with human rights.
Secondary Legislation
- The area of EU secondary legislation is significantly regulated, potentially heavily.
- Secondary legal goals for various legislation are often broad but have granular exceptions.
- Basics of some areas are detailed, but many more situations exist.
Secondary Legislation—Services Directive
- The Services Directive (Directive 2006/123) covers establishment and services, with many exceptions and areas excluded.
- The Services Directive was broadly controversial with 2/3rds of Europe's GDP involved in service-based activities
- Excluded areas include health-care, financial services, private security, audiovisual services, gambling, temporary work services, and services of general interest.
Secondary Legislation—Services Directive (Continued)
- The Services Directive does not explicitly exclude certain services (e.g. Recital 33).
- The Directive itself is something of an eclectic collection covering various services, including business services, legal/fiscal advice, real estate, tourism, tour guides, elderly support, and construction.
- Its main pillars center on easing establishment/service freedoms, simplification of administrative procedures, strengthening recipients' rights, and promoting quality controls.
- Authorisation schemes are non-discriminatory, justified for public interest reasons, and do not have greater restrictions available via other routes.
Secondary Legislation—Services Directive (Continued)
- Key articles for the Services Directive (article 10, 14,15, and 17) discuss general/specific cases, as well as certain prohibition standards.
- Cases in general, like ones involving specific derogations and case-by-case exemptions, are highlighted in this section.
Secondary Legislation—Company Law
- Public and private companies are usually covered under national laws.
- The internal market logic warrants harmonization laws to facilitate company activity across the entire EU market.
- Article 50 TFEU, specifically 50(2)(g), provides the legal basis for this harmonization.
Secondary Legislation—Company Law (Continued)
- Legislation covers company disclosure, capital maintenance, mergers, takeovers, shareholders' rights, and digital tools/processes.
- DSA & DSM obligations detail extra specific duties for large-scale service providers.
- Companies of major significance may have unique regulations, as per the last year's considerations.
Secondary Legislation—Professional Qualifications
- Directive 2005/36, followed by others, addresses professional qualifications.
- This seeks to assist those seeking to exercise professions in another EU member nation.
- Cases of professional cards and common training frameworks are mentioned.
Conclusions
- EU law is generally complicated and controversial; there are many exceptions and carve-outs.
- The Treaty freedoms are surprisingly extensive.
- Multiple justifications are used for restrictions.
- Secondary legislation is substantial.
- Specific rules are developed to address unique situations.
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Description
This quiz explores the key concepts of EU internal market law, specifically focusing on the freedom of establishment and the free movement of services. Students will analyze landmark cases and legal provisions to understand their application in advising on EU market matters. Prepare to delve into the intricacies of secondary legislation and treaty rights.
