L376/36 OfficialJournaloftheEuropeanUnion 27.12.2006 … · 2014. 1. 28. · (12)...

DIRECTIVE 2006/123/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 12 December 2006

on services in the internal market

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO-PEAN UNION,

Having regard to the Treaty establishing the European Commu-nity, and in particular the first and third sentence of Article 47(2)and Article 55 thereof,

Having regard to the proposal from the Commission,

Having regard to the Opinion of the European Economic andSocial Committee (1),

Having regard to the opinion of the Committee of the Regions (2),

Acting in accordance with the procedure laid down in Article 251of the Treaty (3),

Whereas:

(1) The European Community is seeking to forge ever closerlinks between the States and peoples of Europe and toensure economic and social progress. In accordance withArticle 14(2) of the Treaty, the internal market comprisesan area without internal frontiers in which the free move-ment of services is ensured. In accordance with Article 43of the Treaty the freedom of establishment is ensured.Article 49 of the Treaty establishes the right to provideservices within the Community. The elimination of barri-ers to the development of service activities between Mem-ber States is essential in order to strengthen the integrationof the peoples of Europe and to promote balanced andsustainable economic and social progress. In eliminatingsuch barriers it is essential to ensure that the developmentof service activities contributes to the fulfilment of the tasklaid down in Article 2 of the Treaty of promoting through-out the Community a harmonious, balanced and sustain-able development of economic activities, a high level ofemployment and of social protection, equality betweenmen and women, sustainable and non-inflationary growth,a high degree of competitiveness and convergence ofeconomic performance, a high level of protectionand improvement of the quality of the environment, theraising of the standard of living and quality of life andeconomic and social cohesion and solidarity among Mem-ber States.

(2) A competitive market in services is essential in order topromote economic growth and create jobs in the Euro-pean Union. At present numerous barriers within theinternal market prevent providers, particularly small andmedium-sized enterprises (SMEs), from extending theiroperations beyond their national borders and from takingfull advantage of the internal market. This weakens theworldwide competitiveness of European Union providers.A free market which compels the Member States to elimi-nate restrictions on cross-border provision of serviceswhile at the same time increasing transparency and infor-mation for consumers would give consumers wider choiceand better services at lower prices.

(3) The report from the Commission on ‘The State of theInternal Market for Services’ drew up an inventory of alarge number of barriers which are preventing or slowingdown the development of services between Member States,in particular those provided by SMEs, which are predomi-nant in the field of services. The report concludes that adecade after the envisaged completion of the internal mar-ket, there is still a huge gap between the vision of an inte-grated European Union economy and the reality asexperienced by European citizens and providers. The bar-riers affect a wide variety of service activities across allstages of the provider’s activity and have a number ofcommon features, including the fact that they often arisefrom administrative burdens, the legal uncertainty associ-ated with cross-border activity and the lack of mutual trustbetween Member States.

(4) Since services constitute the engine of economic growthand account for 70 % of GDP and employment in mostMember States, this fragmentation of the internal markethas a negative impact on the entire European economy,in particular on the competitiveness of SMEs and themovement of workers, and prevents consumers from gain-ing access to a greater variety of competitively priced ser-vices. It is important to point out that the services sectoris a key employment sector for women in particular, andthat they therefore stand to benefit greatly from newopportunities offered by the completion of the internalmarket for services. The European Parliament and theCouncil have emphasised that the removal of legal barri-ers to the establishment of a genuine internal market is amatter of priority for achieving the goal set by the Euro-pean Council in Lisbon of 23 and 24 March 2000

(1) OJ C 221, 8.9.2005, p. 113.(2) OJ C 43, 18.2.2005, p. 18.(3) Opinion of the European Parliament of 16 February 2006 (not yetpublished in the Official Journal), Council Common Position of24 July 2006 (OJ C 270 E, 7.11.2006, p. 1) and Position of theEuropean Parliament of 15 November 2006. Council Decision of11 December 2006.

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of improving employment and social cohesion and achiev-ing sustainable economic growth so as to make theEuropean Union the most competitive and dynamicknowledge-based economy in the world by 2010, withmore and better jobs. Removing those barriers, whileensuring an advanced European social model, is thus abasic condition for overcoming the difficulties encoun-tered in implementing the Lisbon Strategy and for reviv-ing the European economy, particularly in terms ofemployment and investment. It is therefore important toachieve an internal market for services, with the right bal-ance between market opening and preserving public ser-vices and social and consumer rights.

(5) It is therefore necessary to remove barriers to the free-dom of establishment for providers in Member States andbarriers to the free movement of services as between Mem-ber States and to guarantee recipients and providers thelegal certainty necessary for the exercise in practice ofthose two fundamental freedoms of the Treaty. Since thebarriers in the internal market for services affect opera-tors who wish to become established in other Mem-ber States as well as those who provide a service in anotherMember State without being established there, it is neces-sary to enable providers to develop their service activitieswithin the internal market either by becoming establishedin a Member State or by making use of the free move-ment of services. Providers should be able to choosebetween those two freedoms, depending on their strategyfor growth in each Member State.

(6) Those barriers cannot be removed solely by relying ondirect application of Articles 43 and 49 of the Treaty,since, on the one hand, addressing them on a case-by-case basis through infringement procedures against theMember States concerned would, especially followingenlargement, be extremely complicated for nationaland Community institutions, and, on the other hand, thelifting of many barriers requires prior coordination ofnational legal schemes, including the setting up of admin-istrative cooperation. As the European Parliament and theCouncil have recognised, a Community legislative instru-ment makes it possible to achieve a genuine internal mar-ket for services.

(7) This Directive establishes a general legal framework whichbenefits a wide variety of services while taking intoaccount the distinctive features of each type of activity orprofession and its system of regulation. That frameworkis based on a dynamic and selective approach consistingin the removal, as a matter of priority, of barriers whichmay be dismantled quickly and, for the others, the launch-ing of a process of evaluation, consultation and comple-mentary harmonisation of specific issues, which will makepossible the progressive and coordinated modernisation ofnational regulatory systems for service activities which isvital in order to achieve a genuine internal market for ser-vices by 2010. Provision should be made for a balanced

mix of measures involving targeted harmonisation, admin-istrative cooperation, the provision on the freedom to pro-vide services and encouragement of the development ofcodes of conduct on certain issues. That coordination ofnational legislative regimes should ensure a high degreeof Community legal integration and a high level of pro-tection of general interest objectives, especially protectionof consumers, which is vital in order to establish trustbetween Member States. This Directive also takes intoaccount other general interest objectives, including theprotection of the environment, public security and publichealth as well as the need to comply with labour law.

(8) It is appropriate that the provisions of this Directive con-cerning the freedom of establishment and the free move-ment of services should apply only to the extent that theactivities in question are open to competition, so that theydo not oblige Member States either to liberalise servicesof general economic interest or to privatise public entitieswhich provide such services or to abolish existingmonopolies for other activities or certain distributionservices.

(9) This Directive applies only to requirements which affectthe access to, or the exercise of, a service activity. There-fore, it does not apply to requirements, such as road traf-fic rules, rules concerning the development or use of land,town and country planning, building standards as well asadministrative penalties imposed for non-compliance withsuch rules which do not specifically regulate or specifi-cally affect the service activity but have to be respected byproviders in the course of carrying out their economicactivity in the same way as by individuals acting in theirprivate capacity.

(10) This Directive does not concern requirements governingaccess to public funds for certain providers. Such require-ments include notably those laying down conditions underwhich providers are entitled to receive public funding,including specific contractual conditions, and in particu-lar quality standards which need to be observed as a con-dition for receiving public funds, for example for socialservices.

(11) This Directive does not interfere with measures taken byMember States, in accordance with Community law, inrelation to the protection or promotion of cultural andlinguistic diversity and media pluralism, including thefunding thereof. This Directive does not prevent MemberStates from applying their fundamental rules and prin-ciples relating to the freedom of press and freedom ofexpression. This Directive does not affect Member Statelaws prohibiting discrimination on grounds of nationalityor on grounds such as those set out in Article 13 of theTreaty.

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(12) This Directive aims at creating a legal framework to ensurethe freedom of establishment and the free movement ofservices between the Member States and does not harmo-nise or prejudice criminal law. However, Member Statesshould not be able to restrict the freedom to provide ser-vices by applying criminal law provisions which specifi-cally affect the access to or the exercise of a service activityin circumvention of the rules laid down in this Directive.

(13) It is equally important that this Directive fully respectCommunity initiatives based on Article 137 of the Treatywith a view to achieving the objectives of Article 136thereof concerning the promotion of employmentand improved living and working conditions.

(14) This Directive does not affect terms and conditions ofemployment, including maximum work periods and mini-mum rest periods, minimum paid annual holidays, mini-mum rates of pay as well as health, safety and hygiene atwork, which Member States apply in compliance withCommunity law, nor does it affect relations between socialpartners, including the right to negotiate and conclude col-lective agreements, the right to strike and to take indus-trial action in accordance with national law and practiceswhich respect Community law, nor does it apply to ser-vices provided by temporary work agencies. This Direc-tive does not affect Member States’ social securitylegislation.

(15) This Directive respects the exercise of fundamental rightsapplicable in the Member States and as recognised in theCharter of fundamental Rights of the European Union andthe accompanying explanations, reconciling them with thefundamental freedoms laid down in Articles 43 and 49 ofthe Treaty. Those fundamental rights include the right totake industrial action in accordance with national law andpractices which respect Community law.

(16) This Directive concerns only providers established in aMember State and does not cover external aspects. It doesnot concern negotiations within international organisa-tions on trade in services, in particular in the frameworkof the General Agreement on Trade in Services (GATS).

(17) This Directive covers only services which are performedfor an economic consideration. Services of general inter-est are not covered by the definition in Article 50 of theTreaty and therefore do not fall within the scope of thisDirective. Services of general economic interest are ser-vices that are performed for an economic considerationand therefore do fall within the scope of this Directive.

However, certain services of general economic interest,such as those that may exist in the field of transport, areexcluded from the scope of this Directive and certain otherservices of general economic interest, for example, thosethat may exist in the area of postal services, are the sub-ject of a derogation from the provision on the freedom toprovide services set out in this Directive. This Directivedoes not deal with the funding of services of general eco-nomic interest and does not apply to systems of aidsgranted by Member States, in particular in the social field,in accordance with Community rules on competition. ThisDirective does not deal with the follow-up to the Com-mission White Paper on Services of General Interest.

(18) Financial services should be excluded from the scope ofthis Directive since these activities are the subject of spe-cific Community legislation aimed, as is this Directive, atachieving a genuine internal market for services. Conse-quently, t his exclusion should cover all financial servicessuch as banking, credit, insurance, including reinsurance,occupational or personal pensions, securities, investmentfunds, payments and investment advice, including the ser-vices listed in Annex I to Directive 2006/48/EC of theEuropean Parliament and of the Council of 14 June 2006relating to the taking up and pursuit of the business ofcredit institutions (1).

(19) In view of the adoption in 2002 of a package of legisla-tive instruments relating to electronic communicationsnetworks and services, as well as to associated resourcesand services, which has established a regulatory frame-work facilitating access to those activities within the inter-nal market, notably through the elimination of mostindividual authorisation schemes, it is necessary to excludeissues dealt with by those instruments from the scope ofthis Directive.

(20) The exclusion from the scope of this Directive as regardsmatters of electronic communications services as coveredby Directives 2002/19/EC of the European Parliament andof the Council of 7 March 2002 on access to, and inter-connection of, electronic communications networks andassociated facilities (Access Directive) (2), 2002/20/EC ofthe European Parliament and of the Council of7 March 2002 on the authorisation of electronic commu-nications networks and services (Authorisation Direc-tive) (3), 2002/21/EC of the European Parliament and ofthe Council of 7 March 2002 on a common regulatoryframework for electronic communications networks and

(1) OJ L 177, 30.6.2006, p. 1.(2) OJ L 108, 24.4.2002, p. 7.(3) OJ L 108, 24.4.2002, p. 21.


services (Framework Directive) (1), 2002/22/EC of theEuropean Parliament and of the Council of 7 March 2002on universal service and users’ rights relating to electroniccommunications networks and services (Universal ServiceDirective) (2) and 2002/58/EC of the European Parliamentand of the Council of 12 July 2002 concerning the pro-cessing of personal data and the protection of privacy inthe electronic communications sector (Directive on pri-vacy and electronic communications) (3) should apply notonly to questions specifically dealt with in these Direc-tives but also to matters for which the Directives explic-itly leave to Member States the possibility of adoptingcertain measures at national level.

(21) Transport services, including urban transport, taxis andambulances as well as port services, should be excludedfrom the scope of this Directive.

(22) The exclusion of healthcare from the scope of this Direc-tive should cover healthcare and pharmaceutical servicesprovided by health professionals to patients to assess,maintain or restore their state of health where those activi-ties are reserved to a regulated health profession in theMember State in which the services are provided.

(23) This Directive does not affect the reimbursement ofhealthcare provided in a Member State other than that inwhich the recipient of the care is resident. This issue hasbeen addressed by the Court of Justice on numerous occa-sions, and the Court has recognised patients’ rights. It isimportant to address this issue in another Communitylegal instrument in order to achieve greater legal certaintyand clarity to the extent that this issue is not alreadyaddressed in Council Regulation (EEC) No 1408/71 of14 June 1971 on the application of social securityschemes to employed persons, to self-employed personsand to members of their families moving within theCommunity (4).

(24) Audiovisual services, whatever their mode of transmis-sion, including within cinemas, should also be excludedfrom the scope of this Directive. Furthermore, this Direc-tive should not apply to aids granted by Member States inthe audiovisual sector which are covered by Communityrules on competition.

(25) Gambling activities, including lottery and betting transac-tions, should be excluded from the scope of this Directivein view of the specific nature of these activities, whichentail implementation by Member States of policies relat-ing to public policy and consumer protection.

(26) This Directive is without prejudice to the application ofArticle 45 of the Treaty.

(27) This Directive should not cover those social services in theareas of housing, childcare and support to families andpersons in need which are provided by the State atnational, regional or local level by providers m andatedby the State or by charities recognised as such by the Statewith the objective of ensuring support for those who arepermanently or temporarily in a particular state of needbecause of their insufficient family income or total or par-tial lack of independence and for those who risk beingmarginalised. These services are essential in order to guar-antee the fundamental right to human dignity and integ-rity and are a manifestation of the principles of socialcohesion and solidarity and should not be affected by thisDirective.

(28) This Directive does not deal with the funding of, or thesystem of aids linked to, social services. Nor does it affectthe criteria or conditions set by Member States to ensurethat social services effectively carry out a function to thebenefit of the public interest and social cohesion. In addi-tion, this Directive should not affect the principle of uni-versal service in Member States’ social services.

(29) Given that the Treaty provides specific legal bases for taxa-tion matters and given the Community instrumentsalready adopted in that field, it is necessary to exclude thefield of taxation from the scope of this Directive.

(30) There is already a considerable body of Community lawon service activities. This Directive builds on, and thuscomplements, the Community acquis. Conflicts betweenthis Directive and other Community instruments havebeen identified and are addressed by this Directive, includ-ing by means of derogations. However, it is necessary toprovide a rule for any residual and exceptional cases wherethere is a conflict between a provision of this Directiveand a provision of another Community instrument. Theexistence of such a conflict should be determined in com-pliance with the rules of the Treaty on the right of estab-lishment and the free movement of services.

(1) OJ L 108, 24.4.2002, p. 33.(2) OJ L 108, 24.4.2002, p. 51.(3) OJ L 201, 31.7.2002, p. 37. Directive as amended by Directive2006/24/EC (OJ L 105, 13.4.2006, p. 54).

(4) OJ L 149, 5.7.1971, p. 2. Regulation as last amended by Regulation(EC) No 629/2006 of the European Parliament and of the Council(OJ L 114, 27.4.2006, p. 1).


(31) This Directive is consistent with and does not affect Direc-tive 2005/36/EC of the European Parliament and of theCouncil of 7 September 2005 on the recognition of pro-fessional qualifications (1). It deals with questions otherthan those relating to professional qualifications, forexample professional liability insurance, commercial com-munications, multidisciplinary activities and administra-tive simplification. With regard to temporary cross-borderservice provision, a derogation from the provision onthe freedom to provide services in this Directive ensuresthat Title II on the free provision of services of Directive2005/36/EC is not affected. Therefore, none of the mea-sures applicable under that Directive in the Member Statewhere the service is provided is affected by the provisionon the freedom to provide services.

(32) This Directive is consistent with Community legislationon consumer protection, such as Directive 2005/29/ECof the European Parliament and of the Council of11 May 2005 concerning unfair business-to-consumercommercial practices in the internal market (the UnfairCommercial Practices Directive) (2) and Regulation (EC)No 2006/2004 of the European Parliament and of theCouncil of 27 October 2004 on cooperation betweennational authorities responsible for the enforcement ofconsumer protection laws (the Regulation on consumerprotection cooperation) (3).

(33) The services covered by this Directive concern a wide vari-ety of ever-changing activities, including business servicessuch as management consultancy, certification and test-ing; facilities management, including office maintenance;advertising; recruitment services; and the services of com-mercial agents. The services covered are also services pro-vided both to businesses and to consumers, such as legalor fiscal advice; real estate services such as estate agen-cies; construction, including the services of architects; dis-tributive trades; the organisation of trade fairs; car rental;and travel agencies. Consumer services are also covered,such as those in the field of tourism, including tour guides;leisure services, sports centres and amusement parks; and,to the extent that they are not excluded from the scope ofapplication of the Directive, household support services,such as help for the elderly. Those activities may involveservices requiring the proximity of provider and recipient,services requiring travel by the recipient or the providerand services which may be provided at a distance, includ-ing via the Internet.

(34) According to the case-law of the Court of Justice, theassessment of whether certain activities, in particularactivities which are publicly funded or provided by publicentities, constitute a ‘service’ has to be carried out on acase by case basis in the light of all their characteristics,in particular the way they are provided, organised andfinanced in the Member State concerned. The Court ofJustice has held that the essential characteristic of remu-neration lies in the fact that it constitutes considerationfor the services in question and has recognised that thecharacteristic of remuneration is absent in the case ofactivities performed, for no consideration, by the State oron behalf of the State in the context of its duties in thesocial, cultural, educational and judicial fields, such ascourses provided under the national education system, orthe management of social security schemes which do notengage in economic activity. The payment of a fee byrecipients, for example, a tuition or enrolment fee paid bystudents in order to make a certain contribution to theoperating expenses of a system, does not in itself consti-tute remuneration because the service is still essentiallyfinanced by public funds. These activities are, therefore,not covered by the definition of service in Article 50 ofthe Treaty and do not therefore fall within the scope ofthis Directive.

(35) Non-profit making amateur sporting activities are of con-siderable social importance. They often pursue whollysocial or recreational objectives. Thus, they might not con-stitute economic activities within the meaning of Commu-nity law and should fall outside the scope of this Directive.

(36) The concept of ‘provider’ should cover any natural per-son who is a national of a Member State or any legal per-son engaged in a service activity in a Member State, inexercise either of the freedom of establishment or of thefree movement of services. The concept of provider shouldthus not be limited solely to cross-border service provi-sion within the framework of the free movement of ser-vices but should also cover cases in which an operatorestablishes itself in a Member State in order to develop itsservice activities there. On the other hand, the concept ofa provider should not cover the case of branches in aMember State of companies from third countries because,under Article 48 of the Treaty, the freedom of establish-ment and free movement of services may benefit onlycompanies constituted in accordance with the laws ofa Member State and having their registered office, centraladministration or principal place of business within theCommunity. The concept of ‘recipient’ should also coverthird country nationals who already benefit from rightsconferred upon them by Community acts such as Regula-tion (EEC) No 1408/71, Council Directive 2003/109/ECof 25 November 2003 concerning the status of third-country nationals who are long-term residents (4), Coun-cil Regulation (EC) No 859/2003 of 14 May 2003

(1) OJ L 255, 30.9.2005, p. 22.(2) OJ L 149, 11.6.2005, p. 22.(3) OJ L 364, 9.12.2004, p. 1. Regulation as amended by Directive2005/29/EC. (4) OJ L 16, 23.1.2004, p. 44.


extending the provisions of Regulation (EEC) No 1408/71and Regulation (EEC) No 574/72 to nationals of thirdcountries who are not already covered by those provisionssolely on the ground of their nationality (1) and Directive2004/38/ECof the European Parliament and of the Coun-cil of 29 April 2004 on the right of citizens of the Unionand their family members to move and reside freely withinthe territory of the Member States (2). Furthermore, Mem-ber States may extend the concept of recipient to otherthird country nationals that are present within theirterritory.

(37) The place at which a provider is established should bedetermined in accordance with the case law of the Courtof Justice according to which the concept of establishmentinvolves the actual pursuit of an economic activity througha fixed establishment for an indefinite period. This require-ment may also be fulfilled where a company is consti-tuted for a given period or where it rents the buildingor installation through which it pursues its activity. It mayalso be fulfilled where a Member State grants authorisa-tions for a limited duration only in relation to particularservices. An establishment does not need to take the formof a subsidiary, branch or agency, but may consist of anoffice managed by a provider’s own staff or by a personwho is independent but authorised to act on a permanentbasis for the undertaking, as would be the case with anagency. According to this definition, which requires theactual pursuit of an economic activity at the place of estab-lishment of the provider, a mere letter box does not con-stitute an establishment. Where a provider has severalplaces of establishment, it is important to determine theplace of establishment from which the actual service con-cerned is provided. Where it is difficult to determine fromwhich of several places of establishment a given service isprovided, the location of the provider’s centre of activitiesrelating to this particular service should be that place ofestablishment.

(38) The concept of ‘legal persons’, according to the Treaty pro-visions on establishment, leaves operators free to choosethe legal form which they deem suitable for carrying outtheir activity. Accordingly, ‘legal persons’, within themeaning of the Treaty, means all entities constitutedunder, or governed by, the law of a Member State, irre-spective of their legal form.

(39) The concept of ‘authorisation scheme’ should cover, interalia, the administrative procedures for granting authorisa-tions, licences, approvals or concessions, and also the obli-gation, in order to be eligible to exercise the activity, to

be registered as a member of a profession or entered in aregister, roll or database, to be officially appointed to abody or to obtain a card attesting to membership of a par-ticular profession. Authorisation may be granted not onlyby a formal decision but also by an implicit decision aris-ing, for example, from the silence of the competentauthority or from the fact that the interested party mustawait acknowledgement of receipt of a declaration in orderto commence the activity in question or for the latter tobecome lawful.

(40) The concept of ‘overriding reasons relating to the publicinterest’ to which reference is made in certain provisionsof this Directive has been developed by the Court of Jus-tice in its case law in relation to Articles 43 and 49 of theTreaty and may continue to evolve. The notion as recog-nised in the case law of the Court of Justice covers at leastthe following grounds: public policy, public security andpublic health, within the meaning of Articles 46 and 55of the Treaty; the maintenance of order in society; socialpolicy objectives; the protection of the recipients of ser-vices; consumer protection; the protection of workers,including the social protection of workers; animal wel-fare; the preservation of the financial balance of the socialsecurity system; the prevention of fraud; the preventionof unfair competition; the protection of the environmentand the urban environment, including town and countryplanning; the protection of creditors; safeguarding thesound administration of justice; road safety; the protec-tion of intellectual property; cultural policy objectives,including safeguarding the freedom of expression of vari-ous elements, in particular social, cultural, religious andphilosophical values of society; the need to ensure a highlevel of education, the maintenance of press diversity andthe promotion of the national language; the preservationof national historical and artistic heritage; and veterinarypolicy.

(41) The concept of ‘public policy’, as interpreted by the Courtof Justice, covers the protection against a genuine and suf-ficiently serious threat affecting one of the fundamentalinterests of society and may include, in particular, issuesrelating to human dignity, the protection of minorsand vulnerable adults and animal welfare. Similarly, theconcept of public security includes issues of public safety.

(42) The rules relating to administrative procedures should notaim at harmonising administrative procedures but atremoving overly burdensome authorisation schemes, pro-cedures and formalities that hinder the freedom of estab-lishment and the creation of new service undertakingstherefrom.

(1) OJ L 124, 20.5.2003, p. 1.(2) OJ L 158, 30.4.2004, p. 77.


(43) One of the fundamental difficulties faced, in particular bySMEs, in accessing service activities and exercising themis the complexity, length and legal uncertainty of admin-istrative procedures. For this reason, following the exampleof certain modernising and good administrative practiceinitiatives undertaken at Community and national level, itis necessary to establish principles of administrative sim-plification, inter alia through the limitation of the obliga-tion of prior authorisation to cases in which it is essentialand the introduction of the principle of tacit authorisa-tion by the competent authorities after a certain period oftime elapsed. Such modernising action, while maintainingthe requirements on transparency and the updating ofinformation relating to operators, is intended to eliminatethe delays, costs and dissuasive effects which arise, forexample, from unnecessary or excessively complex andburdensome procedures, the duplication of procedures,the ‘red tape’ involved in submitting documents, the arbi-trary use of powers by the competent authorities, indeter-minate or excessively long periods before a response isgiven, the limited duration of validity of authorisationsgranted and disproportionate fees and penalties. Suchpractices have particularly significant dissuasive effects onproviders wishing to develop their activities in other Mem-ber States and require coordinated modernisation withinan enlarged internal market of twenty-five Member States.

(44) Member States should introduce, where appropriate, formsharmonised at Community level, as established by theCommission, which will serve as an equivalent to certifi-cates, attestations or any other document in relation toestablishment.

(45) In order to examine the need for simplifying proceduresand formalities, Member States should be able, in particu-lar, to take into account their necessity, number, possibleduplication, cost, clarity and accessibility, as well as thedelay and practical difficulties to which they could giverise for the provider concerned.

(46) In order to facilitate access to service activities and theexercise thereof in the internal market, it is necessary toestablish an objective, common to all Member States, ofadministrative simplification and to lay down provisionsconcerning, inter alia, the right to information, proceduresby electronic means and the establishment of a frameworkfor authorisation schemes. Other measures adopted atnational level to meet that objective could involve reduc-tion of the number of procedures and formalities appli-cable to service activities and the restriction of suchprocedures and formalities to those which are essential inorder to achieve a general interest objective and which donot duplicate each other in terms of content or purpose.

(47) With the aim of administrative simplification, general for-mal requirements, such as presentation of original docu-ments, certified copies or a certified translation, should

not be imposed, except where objectively justified by anoverriding reason relating to the public interest, such asthe protection of workers, public health, the protection ofthe environment or the protection of consumers. It is alsonecessary to ensure that an authorisation as a general rulepermits access to, or exercise of, a service activity through-out the national territory, unless a new authorisation foreach establishment, for example for each new hypermar-ket, or an authorisation that is restricted to a specific partof the national territory is objectively justified by an over-riding reason relating to the public interest.

(48) In order to further simplify administrative procedures, itis appropriate to ensure that each provider has a singlepoint through which he can complete all procedures andformalities (hereinafter referred to as ‘points of single con-tact’). The number of points of single contact per MemberState may vary according to regional or local competen-cies or according to the activities concerned. The creationof points of single contact should not interfere with theallocation of functions among competent authoritieswithin each national system. Where several authorities atregional or local level are competent, one of them mayassume the role of point of single contact and coordina-tor. Points of single contact may be set up not only byadministrative authorities but also by chambers of com-merce or crafts, or by the professional organisations orprivate bodies to which a Member State decides to entrustthat function. Points of single contact have an importantrole to play in providing assistance to providers either asthe authority directly competent to issue the documentsnecessary to access a service activity or as an intermedi-ary between the provider and the authorities which aredirectly competent.

(49) The fee which may be charged by points of single contactshould be proportionate to the cost of the procedures andformalities with which they deal. This should not preventMember States from entrusting the points of single con-tact with the collection of other administrative fees, suchas the fee of supervisory bodies.

(50) It is necessary for providers and recipients of services tohave easy access to certain types of information It shouldbe for each Member State to determine, within the frame-work of this Directive, the way in which providers andrecipients are provided with information. In particular, theobligation on Member States to ensure that relevant infor-mation is easily accessible to providers and recipients andthat it can be accessed by the public without obstaclecould be fulfilled by making this information accessiblethrough a website. Any information given should be pro-vided in a clear and unambiguous manner.


(51) The information provided to providers and recipients ofservices should include, in particular, information on pro-cedures and formalities, contact details of the competentauthorities, conditions for access to public registers anddata bases and information concerning available remediesand the contact details of associations and organisationsfrom which providers or recipients can obtain practicalassistance. The obligation on competent authorities toassist providers and recipients should not include the pro-vision of legal advice in individual cases. Nevertheless, gen-eral information on the way in which requirements areusually interpreted or applied should be given. Issues suchas liability for providing incorrect or misleading informa-tion should be determined by Member States.

(52) The setting up, in the reasonably near future, of electronicmeans of completing procedures and formalities will bevital for administrative simplification in the field of ser-vice activities, for the benefit of providers, recipientsand competent authorities. In order to meet that obliga-tion as to results, national laws and other rules applicableto services may need to be adapted. This obligation shouldnot prevent Member States from providing other meansof completing such procedures and formalities, in addi-tion to electronic means. The fact that it must be possibleto complete those procedures and formalities at a distancemeans, in particular, that Member States must ensure thatthey may be completed across borders. The obligation asto results does not cover procedures or formalities whichby their very nature are impossible to complete at a dis-tance. Furthermore, this does not interfere with MemberStates’ legislation on the use of languages.

(53) The granting of licences for certain service activities mayrequire an interview with the applicant by the competentauthority in order to assess the applicant’s personal integ-rity and suitability for carrying out the service in ques-tion. In such cases, the completion of formalities byelectronic means may not be appropriate.

(54) The possibility of gaining access to a service activity shouldbe made subject to authorisation by the competentauthorities only if that decision satisfies the criteria of non-discrimination, necessity and proportionality. That means,in particular, that authorisation schemes should be per-missible only where an a posteriori inspection would notbe effective because of the impossibility of ascertaining thedefects of the services concerned a posteriori, due accountbeing taken of the risks and dangers which could arise in

the absence of a prior inspection. However, the provisionto that effect made by this Directive cannot be relied uponin order to justify authorisation schemes which are pro-hibited by other Community instruments such asDirective 1999/93/EC of the European Parliament and theCouncil of 13 December 1999 on a Community frame-work for electronic signatures (1), or Directive 2000/31/ECof the European Parliament and of the Council of8 June 2000 on certain legal aspects of information soci-ety services, in particular electronic commerce, in theinternal market (Directive on electronic commerce) (2). Theresults of the process of mutual evaluation will make itpossible to determine, at Community level, the types ofactivity for which authorisation schemes should beeliminated.

(55) This Directive should be without prejudice to the possibil-ity for Member States to withdraw authorisations afterthey have been issued, if the conditions for the grantingof the authorisation are no longer fulfilled.

(56) According to the case law of the Court of Justice, publichealth, consumer protection, animal health and the pro-tection of the urban environment constitute overridingreasons relating to the public interest. Such overriding rea-sons may justify the application of authorisation schemesand other restrictions. However, no such authorisationscheme or restriction should discriminate on grounds ofnationality. Further, the principles of necessity and pro-portionality should always be respected.

(57) The provisions of this Directive relating to authorisationschemes should concern cases where the access to or exer-cise of a service activity by operators requires a decisionby a competent authority. This concerns neither decisionsby competent authorities to set up a public or privateentity for the provision of a particular service nor the con-clusion of contracts by competent authorities for the pro-vision of a particular service which is governed by ruleson public procurement, since this Directive does not dealwith rules on public procurement.

(58) In order to facilitate access to and exercise of service activi-ties, it is important to evaluate and report on authorisa-tion schemes and their justification. This reportingobligation concerns only the existence of authorisationschemes and not the criteria and conditions for the grant-ing of an authorisation.

(1) OJ L 13, 19.1.2000, p. 12.(2) OJ L 178, 17.7.2000, p. 1.


(59) The authorisation should as a general rule enable the pro-vider to have access to the service activity, or to exercisethat activity, throughout the national territory, unless aterritorial limit is justified by an overriding reason relat-ing to the public interest. For example, environmental pro-tection may justify the requirement to obtain an individualauthorisation for each installation on the national terri-tory. This provision should not affect regional or localcompetences for the granting of authorisations within theMember States.

(60) This Directive, and in particular the provisions concern-ing authorisation schemes and the territorial scope of anauthorisation, should not interfere with the division ofregional or local competences within the Member States,including regional and local self-government and the useof official languages.

(61) The provision relating to the non-duplication of condi-tions for the granting of an authorisation should not pre-vent Member States from applying their own conditionsas specified in the authorisation scheme. It should onlyrequire that competent authorities, when consideringwhether these conditions are met by the applicant, takeinto account the equivalent conditions which have alreadybeen satisfied by the applicant in another Member State.This provision should not require the application of theconditions for the granting of an authorisation providedfor in the authorisation scheme of another Member State.

(62) Where the number of authorisations available for an activ-ity is limited because of scarcity of natural resources ortechnical capacity, a procedure for selection from amongseveral potential candidates should be adopted with theaim of developing through open competition the qualityand conditions for supply of services available to users.Such a procedure should provide guarantees of transpar-ency and impartiality and the authorisation thus grantedshould not have an excessive duration, be subject to auto-matic renewal or confer any advantage on the providerwhose authorisation has just expired. In particular, theduration of the authorisation granted should be fixed insuch a way that it does not restrict or limit free competi-tion beyond what is necessary in order to enable the pro-vider to recoup the cost of investment and to make a fairreturn on the capital invested. This provision should notprevent Member States from limiting the number ofauthorisations for reasons other than scarcity of naturalresources or technical capacity. These authorisationss-hould remain in any case subject to the other provisionsof this Directive relating to authorisation schemes.

(63) In the absence of different arrangements, failing a responsewithin a time period, an authorisation should be deemedto have been granted. However, different arrangementsmay be put in place in respect of certain activities, where

objectively justified by overriding reasons relating to thepublic interest, including a legitimate interest of third par-ties. Such different arrangements could include nationalrules according to which, in the absence of a response ofthe competent authority, the application is deemed to havebeen rejected, this rejection being open to challenge beforethe courts.

(64) In order to establish a genuine internal market for ser-vices, it is necessary to abolish any restrictions on the free-dom of establishment and the free movement of serviceswhich are still enshrined in the laws of certain MemberStates and which are incompatible with Articles 43 and 49of the Treaty respectively. The restrictions to be prohib-ited particularly affect the internal market for services andshould be systematically dismantled as soon as possible.

(65) Freedom of establishment is predicated, in particular, uponthe principle of equal treatment, which entails the prohi-bition not only of any discrimination on grounds ofnationality but also of any indirect discrimination basedon other grounds but capable of producing the sameresult. Thus, access to a service activity or the exercisethereof in a Member State, either as a principal or second-ary activity, should not be made subject to criteria suchas place of establishment, residence, domicile or principalprovision of the service activity. However, these criteriashould not include requirements according to which aprovider or one of his employees or a representative mustbe present during the exercise of the activity when this isjustified by an overriding reason relating to the publicinterest. Furthermore, a Member State should not restrictthe legal capacity or the right of companies, incorporatedin accordance with the law of another Member State onwhose territory they have their primary establishment, tobring legal proceedings. Moreover, a Member State shouldnot be able to confer any advantages on providers havinga particular national or local socio-economic link; norshould it be able to restrict, on grounds of place of estab-lishment, the provider’s freedom to acquire, exploit or dis-pose of rights and goods or to access different forms ofcredit or accommodation in so far as those choices areuseful for access to his activity or for the effective exer-cise thereof.

(66) Access to or the exercise of a service activity in the terri-tory of a Member State should not be subject to an eco-nomic test. The prohibition of economic tests as aprerequisite for the grant of authorisation should covereconomic tests as such, but not requirements which areobjectively justified by overriding reasons relating to thepublic interest, such as the protection of the urban envi-ronment, social policy or public health. The prohibitionshould not affect the exercise of the powers of the authori-ties responsible for applying competition law.


(67) With respect to financial guarantees or insurance, the pro-hibition of requirements should concern only the obliga-tion that the requested financial guarantees or insurancemust be obtained from a financial institution establishedin the Member State concerned.

(68) With respect to pre-registration, the prohibition of require-ments should concern only the obligation that the pro-vider, prior to the establishment, be pre-registered for agiven period in a register held in the Member Stateconcerned.

(69) In order to coordinate the modernisation of national rulesand regulations in a manner consistent with the require-ments of the internal market, it is necessary to evaluatecertain non-discriminatory national requirements which,by their very nature, could severely restrict or even pre-vent access to an activity or the exercise thereof under thefreedom of establishment. This evaluation process shouldbe limited to the compatibility of these requirements withthe criteria already established by the Court of Justice onthe freedom of establishment. It should not concern theapplication of Community competition law. Where suchrequirements are discriminatory or not objectively justi-fied by an overriding reason relating to the public inter-est, or where they are disproportionate, they must beabolished or amended. The outcome of this assessmentwill be different according to the nature of the activity andthe public interest concerned. In particular, such require-ments could be fully justified when they pursue socialpolicy objectives.

(70) For the purposes of this Directive, and without prejudiceto Article 16 of the Treaty, services may be considered tobe services of general economic interest only if they areprovided in application of a special task in the public inter-est entrusted to the provider by the Member State con-cerned. This assignment should be made by way of oneor more acts, the form of which is determined by theMember State concerned, and should specify the precisenature of the special task.

(71) The mutual evaluation process provided for in this Direc-tive should not affect the freedom of Member States to setin their legislation a high level of protection of the publicinterest, in particular in relation to social policy objectives.Furthermore, it is necessary that the mutual evaluationprocess take fully into account the specificity of servicesof general economic interest and of the particular tasksassigned to them. This may justify certain restrictions onthe freedom of establishment, in particular where suchrestrictions pursue the protection of public health andsocial policy objectives and where they satisfy the condi-tions set out in Article 15(3)(a), (b) and (c). For example,with regard to the obligation to take a specific legal form

in order to exercise certain services in the social field, theCourt of Justice has already recognised that it may be jus-tified to subject the provider to a requirement to be non-profit making.

(72) Services of a general economic interest are entrusted withimportant tasks relating to social and territorial cohesion.The performance of these tasks should not be obstructedas a result of the evaluation process provided for in thisDirective. Requirements which are necessary for the fulfil-ment of such tasks should not be affected by this processwhile, at the same time, unjustified restrictions on the free-dom of establishment should be addressed.

(73) The requirements to be examined include national ruleswhich, on grounds other than those relating to profes-sional qualifications, reserve access to certain activities toparticular providers. These requirements also include obli-gations on a provider to take a specific legal form, in par-ticular to be a legal person, to be a company withindividual ownership, to be a non-profit making organi-sation or a company owned exclusively by natural per-sons, and requirements which relate to the shareholdingof a company, in particular obligations to hold a mini-mum amount of capital for certain service activities or tohave a specific qualification in order to hold share capitalin or to manage certain companies. The evaluation of thecompatibility of fixed minimum and/or maximum tariffswith the freedom of establishment concerns only tariffsimposed by competent authorities specifically for the pro-vision of certain services and not, for example, generalrules on price determination, such as for the renting ofhouses.

(74) The mutual evaluation process means that during thetransposition period Member States will first have to con-duct a screening of their legislation in order to ascertainwhether any of the above mentioned requirements existsin their legal systems. At the latest by the end of the trans-position period, Member States should draw up a reporton the results of this screening. Each report will be sub-mitted to all other Member States and interested parties.Member States will then have six months in which to sub-mit their observations on these reports. At the latest byone year after the date of transposition of this Directive,the Commission should draw up a summary report,accompanied where appropriate by proposals for furtherinitiatives. If necessary the Commission, in cooperationwith the Member States, could assist them to design acommon method.

(75) The fact that this Directive specifies a number of require-ments to be abolished or evaluated by the Member Statesduring the transposition period is without prejudice to anyinfringement proceedings against a Member State for fail-ure to fulfil its obligations under Articles 43 or 49 of theTreaty.


(76) This Directive does not concern the application ofArticles 28 to 30 of the Treaty relating to the free move-ment of goods. The restrictions prohibited pursuant to theprovision on the freedom to provide services cover therequirements applicable to access to service activities orto the exercise thereof and not those applicable to goodsas such.

(77) Where an operator travels to another Member State toexercise a service activity there, a distinction should bemade between situations covered by the freedom of estab-lishment and those covered, due to the temporary natureof the activities concerned, by the free movement of ser-vices. As regards the distinction between the freedom ofestablishment and the free movement of services, accord-ing to the case law of the Court of Justice the key elementis whether or not the operator is established in the Mem-ber State where it provides the service concerned. If theoperator is established in the Member State where it pro-vides its services, it should come under the scope of appli-cation of the freedom of establishment. If, by contrast, theoperator is not established in the Member State where theservice is provided, its activities should be covered by thefree movement of services. The Court of Justice has con-sistently held that the temporary nature of the activitiesin question should be determined in the light not only ofthe duration of the provision of the service, but also of itsregularity, periodical nature or continuity. The fact thatthe activity is temporary should not mean that the pro-vider may not equip itself with some forms of infrastruc-ture in the Member State where the service is provided,such as an office, chambers or consulting rooms, in so faras such infrastructure is necessary for the purposes of pro-viding the service in question.

(78) In order to secure effective implementation of the freemovement of services and to ensure that recipients andproviders can benefit from and supply services through-out the Community regardless of borders, it is necessaryto clarify the extent to which requirements of the Mem-ber State where the service is provided can be imposed. Itis indispensable to provide that the provision on the free-dom to provide services does not prevent the MemberState where the service is provided from imposing, incompliance with the principles set out in Article 16(1)(a)to (c), its specific requirements for reasons of public policyor public security or for the protection of public healthor the environment.

(79) The Court of Justice has consistently held that MemberStates retain the right to take measures in order to pre-vent providers from abusively taking advantage of theinternal market principles. Abuse by a provider should beestablished on a case by case basis.

(80) It is necessary to ensure that providers are able to takeequipment which is integral to the provision of their ser-vice with them when they travel to provide services inanother Member State. In particular, it is important toavoid cases in which the service could not be providedwithout the equipment or situations in which providersincur additional costs, for example, by hiring or purchas-ing different equipment to that which they habitually useor by needing to deviate significantly from the way theyhabitually carry out their activity.

(81) The concept of equipment does not refer to physicalobjects which are either supplied by the provider to theclient or become part of a physical object as a result ofthe service activity, such as building materials or spareparts, or which are consumed or left in situ in the courseof the service provision, such as combustible fuels, explo-sives, fireworks, pesticides, poisons or medicines.

(82) The provisions of this Directive should not preclude theapplication by a Member State of rules on employmentconditions. Rules laid down by law, regulation or admin-istrative provisions should, in accordance with the Treaty,be justified for reasons relating to the protection of work-ers and be non-discriminatory, necessary, and proportion-ate, as interpreted by the Court of Justice, and comply withother relevant Community law.

(83) It is necessary to ensure that the provision on the free-dom to provide services may be departed from only in theareas covered by derogations. Those derogations are nec-essary in order to take into account the level of integra-tion of the internal market or certain Communityinstruments relating to services pursuant to which a pro-vider is subject to the application of a law other than thatof the Member State of establishment. Moreover, by wayof exception, measures against a given provider shouldalso be adopted in certain individual cases and under cer-tain strict procedural and substantive conditions. In addi-tion, any restriction of the free movement of servicesshould be permitted, by way of exception, only if it is con-sistent with fundamental rights which form an integralpart of the general principles of law enshrined in the Com-munity legal order.

(84) The derogation from the provision on the freedom to pro-vide services concerning postal services should cover bothactivities reserved to the universal service provider andother postal services.


(85) The derogation from the provision on the freedom to pro-vide services relating to the judicial recovery of debts andthe reference to a possible future harmonisation instru-ment should concern only the access to and the exerciseof activities which consist, notably, in bringing actionsbefore a court relating to the recovery of debts.

(86) This Directive should not affect terms and conditions ofemployment which, pursuant to Directive 96/71/ECof theEuropean Parliament and of the Council of 16 Decem-ber 1996 concerning the posting of workers in the frame-work of the provision of services (1), apply to workersposted to provide a service in the territory of anotherMember State. In such cases, Directive 96/71/EC stipu-lates that providers have to comply with terms and con-ditions of employment in a listed number of areasapplicable in the Member State where the service is pro-vided. These are: maximum work periods and minimumrest periods, minimum paid annual holidays, minimumrates of pay, including overtime rates, the conditions ofhiring out of workers, in particular the protection of work-ers hired out by temporary employment undertakings,health, safety and hygiene at work, protective measureswith regard to the terms and conditions of employmentof pregnant women or women who have recently givenbirth and of children and young people and equality oftreatment between men and women and other provisionson non-discrimination. This not only concerns termsand conditions of employment which are laid down bylaw but also those laid down in collective agreements orarbitration awards that are officially declared or de factouniversally applicable within the meaning of Directive96/71/EC. Moreover, this Directive should not preventMember States from applying terms and conditions ofemployment on matters other than those listed inArticle 3(1) of Directive 96/71/EC on the grounds of pub-lic policy.

(87) Neither should this Directive affect terms and conditionsof employment in cases where the worker employed forthe provision of a cross-border service is recruited in theMember State where the service is provided. Furthermore,this Directive should not affect the right for the MemberState where the service is provided to determine the exist-ence of an employment relationship and the distinctionbetween self-employed persons and employed persons,including ‘false self-employed persons’. In that respect theessential characteristic of an employment relationshipwithin the meaning of Article 39 of the Treaty should bethe fact that for a certain period of time a person pro-vides services for and under the direction of another

person in return for which he receives remuneration. Anyactivity which a person performs outside a relationship ofsubordination must be classified as an activity pursued ina self-employed capacity for the purposes of Articles 43and 49 of the Treaty.

(88) The provision on the freedom to provide services shouldnot apply in cases where, in conformity with Communitylaw, an activity is reserved in a Member State to a particu-lar profession, for example requirements which reserve theprovision of legal advice to lawyers.

(89) The derogation from the provision on the freedom to pro-vide services concerning matters relating to the registra-tion of vehicles leased in a Member State other than thatin which they are used follows from the case law of theCourt of Justice, which has recognised that a Member Statemay impose such an obligation, in accordance with pro-portionate conditions, in the case of vehicles used on itsterritory. That exclusion does not cover occasional or tem-porary rental.

(90) Contractual relations between the provider and the clientas well as between an employer and employee should notbe subject to this Directive. The applicable law regardingthe contractual or non contractual obligations of the pro-vider should be determined by the rules of private inter-national law.

(91) It is necessary to afford Member States the possibility,exceptionally and on a case-by-case basis, of taking mea-sures which derogate from the provision on the freedomto provide services in respect of a provider established inanother Member State on grounds of the safety of ser-vices. However, it should be possible to take such mea-sures only in the absence of harmonisation at Communitylevel.

(92) Restrictions on the free movement of services, contrary tothis Directive, may arise not only from measures appliedto providers, but also from the many barriers to the useof services by recipients, especially consumers. This Direc-tive mentions, by way of illustration, certain types ofrestriction applied to a recipient wishing to use a serviceperformed by a provider established in another MemberState. This also includes cases where recipients of a ser-vice are under an obligation to obtain authorisation fromor to make a declaration to their competent authorities inorder to receive a service from a provider established inanother Member State. This does not concern generalauthorisation schemes which also apply to the use of aservice supplied by a provider established in the sameMember State.(1) OJ L 18, 21.1.1997, p. 1.


(93) The concept of financial assistance provided for the useof a particular service should not apply to systems of aidsgranted by Member States, in particular in the social fieldor in the cultural sector, which are covered by Commu-nity rules on competition, nor to general financial assis-tance not linked to the use of a particular service, forexample grants or loans to students.

(94) In accordance with the Treaty rules on the free movementof services, discrimination on grounds of the nationalityof the recipient or national or local residence is prohib-ited. Such discrimination could take the form of an obli-gation, imposed only on nationals of another MemberState, to supply original documents, certified copies, a cer-tificate of nationality or official translations of documentsin order to benefit from a service or from more advanta-geous terms or prices. However, the prohibition of dis-criminatory requirements should not preclude thereservation of advantages, especially as regards tariffs,to certain recipients, if such reservation is based on legiti-mate and objective criteria.

(95) The principle of non-discrimination within the internalmarket means that access by a recipient, and especially bya consumer, to a service on offer to the public may notbe denied or restricted by application of a criterion,included in general conditions made available to the pub-lic, relating to the recipient’s nationality or place of resi-dence. It does not follow that it will be unlawfuldiscrimination if provision were made in such general con-ditions for different tariffs and conditions to apply to theprovision of a service, where those tariffs, prices and con-ditions are justified for objective reasons that can varyfrom country to country, such as additional costs incurredbecause of the distance involved or the technical charac-teristics of the provision of the service, or different mar-ket conditions, such as higher or lower demand influencedby seasonality, different vacation periods in the MemberStates and pricing by different competitors, or extra riskslinked to rules differing from those of the Member Stateof establishment. Neither does it follow that the non-provision of a service to a consumer for lack of therequired intellectual property rights in a particular terri-tory would constitute unlawful discrimination.

(96) It is appropriate to provide that, as one of the means bywhich the provider may make the information which heis obliged to supply easily accessible to the recipient, hesupply his electronic address, including that of his web-site. Furthermore, the obligation to make available certaininformation in the provider’s information documentswhich present his services in detail should not cover com-mercial communications of a general nature, such as

advertising, but rather documents giving a detaileddescription of the services proposed, including documentson a website.

(97) It is necessary to provide in this Directive for certain ruleson high quality of services, ensuring in particular informa-tion and transparency requirements. These rules shouldapply both in cases of cross border provision of servicesbetween Member States and in cases of services providedin a Member State by a provider established there, with-out imposing unnecessary burdens on SMEs. They shouldnot in any way prevent Member States from applying, inconformity with this Directive and other Community law,additional or different quality requirements.

(98) Any operator providing services involving a direct andparticular health, safety or financial risk for the recipientor a third person should, in principle, be covered byappropriate professional liability insurance, or by anotherform of guarantee which is equivalent or comparable,which means, in particular, that such an operator shouldas a general rule have adequate insurance cover for ser-vices provided in one or more Member States other thanthe Member State of establishment.

(99) The insurance or guarantee should be appropriate to thenature and extent of the risk. Therefore it should be nec-essary for the provider to have cross-border cover only ifthat provider actually provides services in other MemberStates. Member States should not lay down more detailedrules concerning the insurance cover and fix for exampleminimum thresholds for the insured sum or limits onexclusions from the insurance cover. Providers and insur-ance companies should maintain the necessary flexibilityto negotiate insurance policies precisely targeted to thenature and extent of the risk. Furthermore, it is not neces-sary for an obligation of appropriate insurance to be laiddown by law. It should be sufficient if an insurance obli-gation is part of the ethical rules laid down by profes-sional bodies. Finally, there should be no obligation forinsurance companies to provide insurance cover.

(100) It is necessary to put an end to total prohibitions on com-mercial communications by the regulated professions, notby removing bans on the content of a commercial com-munication but rather by removing those bans which, ina general way and for a given profession, forbid one ormore forms of commercial communication, such as a banon all advertising in one or more given media. As regardsthe content and methods of commercial communication,it is necessary to encourage professionals to draw up, inaccordance with Community law, codes of conduct atCommunity level.


(101) It is necessary and in the interest of recipients, in particu-lar consumers, to ensure that it is possible for providersto offer multidisciplinary services and that restrictions inthis regard be limited to what is necessary to ensure theimpartiality, independence and integrity of the regulatedprofessions. This does not affect restrictions or prohibi-tions on carrying out particular activities which aim atensuring independence in cases in which a Member Stateentrusts a provider with a particular task, notably in thearea of urban development, nor should it affect the appli-cation of competition rules.

(102) In order to increase transparency and promote assess-ments based on comparable criteria with regard to thequality of the services offered and supplied to recipients,it is important that information on the meaning of qual-ity labels and other distinctive marks relating to these ser-vices be easily accessible. That obligation of transparencyis particularly important in areas such as tourism, espe-cially the hotel business, in which the use of a system ofclassification is widespread. Moreover, it is appropriate toexamine the extent to which European standardisationcould facilitate compatibility and quality of services.European standards are drawn up by the Europeanstandards-setting bodies, the European Committee forStandardisation (CEN), the European Committee for Elec-trotechnical Standardisation (CENELEC) and the EuropeanTelecommunications Standards Institute (ETSI). Whereappropriate, the Commission may, in accordance with theprocedures laid down in Directive 98/34/EC of the Euro-pean Parliament and of the Council of 22 June 1998 lay-ing down a procedure for the provision of information inthe field of technical standards and regulations (1) and ofrules on Information Society services, issue a mandate forthe drawing up of specific European standards.

(103) In order to solve potential problems with compliance withjudicial decisions, it is appropriate to provide that Mem-ber States recognise equivalent guarantees lodged withinstitutions or bodies such as banks, insurance providersor other financial services providers established in anotherMember State.

(104) The development of a network of Member States’ con-sumer protection authorities, which is the subject of Regu-lation (EC) No 2006/2004, complements the cooperationprovided for in this Directive. The application of con-sumer protection legislation in cross-border cases, in par-ticular with regard to new marketing and selling practices,as well as the need to remove certain specific obstaclesto cooperation in this field, necessitates a greater degreeof cooperation between Member States. In particular, it is

necessary in this area to ensure that Member States requirethe cessation of illegal practices by operators in their ter-ritory who target consumers in another Member State.

(105) Administrative cooperation is essential to make the inter-nal market in services function properly. Lack of coopera-tion between Member States results in proliferation ofrules applicable to providers or duplication of controls forcross-border activities, and can also be used by rogue trad-ers to avoid supervision or to circumvent applicablenational rules on services. It is, therefore, essential to pro-vide for clear, legally binding obligations for MemberStates to cooperate effectively.

(106) For the purposes of the Chapter on administrative coop-eration, ‘supervision’ should cover activities such as moni-toring and fact finding, problem solving, enforcementand imposition of sanctions and subsequent follow-upactivities.

(107) In normal circumstances mutual assistance should takeplace directly between competent authorities. The liaisonpoints designated by Member States should be required tofacilitate this process only in the event of difficulties beingencountered, for instance if assistance is required to iden-tify the relevant competent authority.

(108) Certain obligations of mutual assistance should apply toall matters covered by this Directive, including those relat-ing to cases where a provider establishes in another Mem-ber State. Other obligations of mutual assistance shouldapply only in cases of cross-border provision of services,where the provision on the freedom to provide servicesapplies. A further set of obligations should apply in allcases of cross-border provision of services, including areasnot covered by the provision on the freedom to provideservices. Cross-border provision of services should includecases where services are provided at a distance and wherethe recipient travels to the Member State of establishmentof the provider in order to receive services.

(109) In cases where a provider moves temporarily to a Mem-ber State other than the Member State of establishment, itis necessary to provide for mutual assistance betweenthose two Member States so that the former can carry outchecks, inspections and enquiries at the request of theMember State of establishment or carry out such checkson its own initiative if these are merely factual checks.

(110) It should not be possible for Member States to circum-vent the rules laid down in this Directive, including theprovision on the freedom to provide services, by conduct-ing checks, inspections or investigations which are dis-criminatory or disproportionate.

(1) OJ L 204, 21.7.1998, p. 37. Directive as last amended by the 2003Act of Accession.


(111) The provisions of this Directive concerning exchange ofinformation regarding the good repute of providers shouldnot pre-empt initiatives in the area of police and judicialcooperation in criminal matters, in particular on theexchange of information between law enforcementauthorities of the Member States and on criminal records.

(112) Cooperation between Member States requires a well-functioning electronic information system in order toallow competent authorities easily to identify their rel-evant interlocutors in other Member States and to com-municate in an efficient way.

(113) It is necessary to provide that the Member States, in coop-eration with the Commission, are to encourage interestedparties to draw up codes of conduct at Community level,aimed, in particular, at promoting the quality of servicesand taking into account the specific nature of each profes-sion. Those codes of conduct should comply with Com-munity law, especially competition law. They should becompatible with legally binding rules governing profes-sional ethics and conduct in the Member States.

(114) Member States should encourage the setting up of codesof conduct, in particular, by professional bodies, organi-sations and associations at Community level. These codesof conduct should include, as appropriate to the specificnature of each profession, rules for commercial commu-nications relating to the regulated professions and rules ofprofessional ethics and conduct of the regulated profes-sions which aim, in particular, at ensuring independence,impartiality and professional secrecy. In addition, the con-ditions to which the activities of estate agents are subjectshould be included in such codes of conduct. MemberStates should take accompanying measures to encourageprofessional bodies, organisations and associationsto implement at national level the codes of conductadopted at Community level.

(115) Codes of conduct at Community level are intended to setminimum standards of conduct and are complementaryto Member States’ legal requirements. They do not pre-clude Member States, in accordance with Community law,from taking more stringent measures in law or nationalprofessional bodies from providing for greater protectionin their national codes of conduct.

(116) Since the objectives of this Directive, namely the elimina-tion of barriers to the freedom of establishment for pro-viders in the Member States and to the free provision ofservices between Member States, cannot be sufficientlyachieved by the Member States and can therefore, byreason of the scale of the action, be better achieved atCommunity level, the Community may adopt measures,

in accordance with the principle of subsidiarity as set outin Article 5 of the Treaty. In accordance with the prin-ciple of proportionality, as set out in that Article, thisDirective does not go beyond what is necessary in orderto achieve those objectives.

(117) The measures necessary for the implementation of thisDirective should be adopted in accordance with CouncilDecision 1999/468/EC of 28 June 1999 laying down theprocedures for the exercise of implementing powers con-ferred on the Commission (1).

(118) In accordance with paragraph 34 of the InterinstitutionalAgreement on better law-making (2), Member States areencouraged to draw up, for themselves and in the interestof the Community, their own tables, which will, as far aspossible, illustrate the correlation between the Directiveand the transposition measures, and to make them public,

HAVE ADOPTED THIS DIRECTIVE:

CHAPTER I

GENERAL PROVISIONS

Article 1

Subject matter

1. This Directive establishes general provisions facilitating theexercise of the freedom of establishment for service providersand the free movement of services, while maintaining a highquality of services.

2. This Directive does not deal with the liberalisation of ser-vices of general economic interest, reserved to public or privateentities, nor with the privatisation of public entities providingservices.

3. This Directive does not deal with the abolition of monopo-lies providing services nor with aids granted by Member Stateswhich are covered by Community rules on competition.

This Directive does not affect the freedom of Member States todefine, in conformity with Community law, what they considerto be services of general economic interest, how those servicesshould be organised and financed, in compliance with theState aid rules, and what specific obligations they should besubject to.

4. This Directive does not affect measures taken at Commu-nity level or at national level, in conformity with Communitylaw, to protect or promote cultural or linguistic diversity or mediapluralism.

(1) OJ L 184, 17.7.1999, p. 23. Decision as amended by Decision2006/512/EC (OJ L 200, 22.7.2006, p. 11).

(2) OJ C 321, 31.12.2003, p. 1.


5. This Directive does not affect Member States’ rules of crimi-nal law. However, Member States may not restrict the freedomto provide services by applying criminal law provisions whichspecifically regulate or affect access to or exercise of a serviceactivity in circumvention of the rules laid down in this Directive.

6. This Directive does not affect labour law, that is any legalor contractual provision concerning employment conditions,working conditions, including health and safety at work and therelationship between employers and workers, which MemberStates apply in accordance with national law which respectsCommunity law. Equally, this Directive does not affect the socialsecurity legislation of the Member States.

7. This Directive does not affect the exercise of fundamentalrights as recognised in the Member States and by Communitylaw. Nor does it affect the right to negotiate, conclude andenforce collective agreements and to take industrial action inaccordance with national law and practices which respect Com-munity law.

Article 2

Scope

1. This Directive shall apply to services supplied by providersestablished in a Member State.

2. This Directive shall not apply to the following activities:

(a) non-economic services of general interest;

(b) financial services, such as banking, credit, insurance andre-insurance, occupational or personal pensions, securities,investment funds, payment and investment advice, includ-ing the services listed in Annex I to Directive 2006/48/EC;

(c) electronic communications services and networks, andassociated facilities and services, with respect to matters cov-ered by Directives 2002/19/EC, 2002/20/EC, 2002/21/EC,2002/22/EC and 2002/58/EC;

(d) services in the field of transport, including port services, fall-ing within the scope of Title V of the Treaty;

(e) services of temporary work agencies;

(f) healthcare services whether or not they are provided viahealthcare facilities, and regardless of the ways in which theyare organised and financed at national level or whether theyare public or private;

(g) audiovisual services, including cinematographic services,whatever their mode of production, distribution and trans-mission, and radio broadcasting;

(h) gambling activities which involve wagering a stake withpecuniary value in games of chance, including lotteries, gam-bling in casinos and betting transactions;

(i) activities which are connected with the exercise of officialauthority as set out in Article 45 of the Treaty;

(j) social services relating to social housing, childcare and sup-port of families and persons permanently or temporarily inneed which are provided by the State, by providers man-dated by the State or by charities recognised as such by theState;

(k) private security services;

(l) services provided by notaries and bailiffs, who are appointedby an official act of government.

3. This Directive shall not apply to the field of taxation.

Article 3

Relationship with other provisions of Community law

1. If the provisions of this Directive conflict with a provisionof another Community act governing specific aspects of accessto or exercise of a service activity in specific sectors or for spe-cific professions, the provision of the other Community act shallprevail and shall apply to those specific sectors or professions.These include:

(a) Directive 96/71/EC;

(b) Regulation (EEC) No 1408/71;

(c) Council Directive 89/552/EEC of 3 October 1989 on thecoordination of certain provisions laid down by law, regula-tion or administrative action in Member States concerningthe pursuit of television broadcasting activities (1);

(d) Directive 2005/36/EC.

2. This Directive does not concern rules of private interna-tional law, in particular rules governing the law applicable to con-tractual and non contractual obligations, including those whichguarantee that consumers benefit from the protection granted tothem by the consumer protection rules laid down in the con-sumer legislation in force in their Member State.

(1) OJ L 298, 17.10.1989, p. 23. Directive as amended by Directive97/36/EC of the European Parliament and of the Council (OJ L 202,30.7.1997, p. 60).


3. Member States shall apply the provisions of this Directivein compliance with the rules of the Treaty on the right of estab-lishment and the free movement of services.

Article 4

Definitions

For the purposes of this Directive, the following definitions shallapply:

1) ‘service’ means any self-employed economic activity, nor-mally provided for remuneration, as referred to in Article 50of the Treaty;

2) ‘provider’ means any natural person who is a national of aMember State, or any legal person as referred to in Article 48of the Treaty and established in a Member State, who offersor provides a service;

3) ‘recipient’ means any natural person who is a national of aMember State or who benefits from rights conferred uponhim by Community acts, or any legal person as referred to inArticle 48 of the Treaty and established in a Member State,who, for professional or non-professional purposes, uses, orwishes to use, a service;

4) ‘Member State of establishment’ means the Member State inwhose territory the provider of the service concerned isestablished;

5) ‘establishment’ means the actual pursuit of an economicactivity, as referred to in Article 43 of the Treaty, by the pro-vider for an indefinite period and through a stable infrastruc-ture from where the business of providing services is actuallycarried out;

6) ‘authorisation scheme’ means any procedure under which aprovider or recipient is in effect required to take steps inorder to obtain from a competent authority a formal deci-sion, or an implied decision, concerning access to a serviceactivity or the exercise thereof;

7) ‘requirement’ means any obligation, prohibition, conditionor limit provided for in the laws, regulations or administra-tive provisions of the Member States or in consequence ofcase-law, administrative practice, the rules of professionalbodies, or the collective rules of professional associations orother professional organisations, adopted in the exercise oftheir legal autonomy; rules laid down in collective agree-ments negotiated by the social partners shall not as such beseen as requirements within the meaning of this Directive;

8) ‘overriding reasons relating to the public interest’ means rea-sons recognised as such in the case law of the Court of Jus-tice, including the following grounds: public policy; publicsecurity; public safety; public health; preserving the finan-cial equilibrium of the social security system; the protection

of consumers, recipients of services and workers; fairness oftrade transactions; combating fraud; the protection of theenvironment and the urban environment; the health of ani-mals; intellectual property; the conservation of the nationalhistoric and artistic heritage; social policy objectives and cul-tural policy objectives;

9) ‘competent authority’ means any body or authority whichhas a supervisory or regulatory role in a Member State inrelation to service activities, including, in particular, admin-istrative authorities, including courts acting as such, profes-sional bodies, and those professional associations or otherprofessional organisations which, in the exercise of theirlegal autonomy, regulate in a collective manner access toservice activities or the exercise thereof;

10) ‘Member State where the service is provided’ means

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