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The freedom of establishment and provision of services- derogations and public-interest justifications
European Law (LW511)
University of Kent
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The freedom of establishment and provision of services:
derogations and public-interest justiications-
Todays’ focus-
- Explore the regulation of and limitations on the powers of EU member states to discriminate against, or place and defend , restrictions on the freedom of businesses, professionals, and the self-employed to access, establish, and/or provide services in a Member State other than their country of nationality.
Recap: Last Lecture-
- The freedom of establishment in article 49 TFEU includes the right to establish a primary business (primary establishment) and the right to set up extensions (e., subsidiary or agency) of a primary business in another member state in whatever legal form is appropriate ( secondary establishment ).
- The freedom to provide services in article 56 TFEU includes the right to cross borders to provide a service, the right to cross borders to receive a service, and the right to provide or receive a service (e., online) without crossing a border.
- Moral or ethical concerns do not determine whether a remunerated activity is considered a service for the purposes of EU law.
- The main diference between establishment and the provision of services is that the provision of services is temporary whereas establishment is permanent, semi- permanent or stable and continuous.
- EU member states are under a legal obligation to remove all restrictions, whether discriminatory or not, that hinder the freedom to establish or provide services in another member state.
- These obligations apply to EU can even apply to private organisations particularly with quasi-regulatory functions or the power to hinder the freedom of EU businesses, professionals, and the self-employed to access, establish themselves, or provide services in another member state.
Key points –
- Openly discriminatory measures can only be justiied on the basis of public interest justiications provided in 51(1), 52(1), and 62 TFEU.
- Measures that discriminate indirectly or simply restrict the freedom of establishment or the provision of services can be justiied on the basis of the treaty derogations and other “imperative reasons in the public interest” developed continuously by the CJEU.
- In defending any restriction, whether discriminatory or not, member states must ensure such measures are proportionate and not driven by a protectionist economic motive.
General Derogations: Articles 52(1) and 62 TFEU-
- Member states can defend openly discriminatory measures on the basis of articles 52(1) TFEU, which applies to establishment, and 62 TFEU, which applies to the provision of services, and covers only Public policy, security, and health.
- All restrictions must be compatible with the principle of proportionality, are subject to judicial redress, and must not be driven by a protectionist economic motive ( Eglise de Scientology).
Eglise de Scientology- Court has said only where member states interpret these public interest justiication strictly and narrowly and they apply them proportionately and only to achieve public objective. They ensure EU nationals that are negatively afected by the use of these derogations have available to them judicial redress mechanisms.
Article 52(1) Exercise of Oicial Authority-
- Article 52(1) allows Member States to exclude and discriminate directly against foreign EU nationals from establishing themselves or providing services which, in
creditors, minority shareholders, or employees ( Überseering); and, importantly, the need to protect workers ( Viking Line ) and respect fundamental rights, such as respect for human dignity ( Omega ) and/or freedom of expression or f assembly ( Schmidberger ).
Viking Line-
If you recall Viking line was about a company based
then a high wage in your country that sought to relag
or change its primary place of establishment to a lower
wage in your country so it could employ low paid
workers to replace its workers in the higher wage
country, an Association of au trade unions worked
across borders to stop this company and to stop
company from relagging or establishing itself in a
lower wage country, the CJEU held that about where
Trade unions have the power to restrict the ability of an
EU business to access to establish themselves in
another EU member state Article 49 TFEU could apply
to these private organisations and so could have
extended vertical direct efect.
This case is important because the CJEU held that in
that case That trade unions or member states could
rely on the protection of workers as a justiication to
defend industrial action against companies like Viking
line it added that such restrictions would need to be
strictly necessary and proportionate that is trade
unions or member states imposing restrictive measures
it would have to show that industrial action or strikes
were the least restrictive option available to them to
achieve the objective of protecting workers rights and
interests the court also held that trade unions would
have to show they had exhausted or tried all other
options before taken industrial action or any other
measure that restricts the freedom of Eu businesses to
establish themselves in another EU country.
Omega-
A British Business was restricted from providing services To a German company that used its equipment to run a laser tag facility in Germany. The facility in Germany allowed customers to engage in a paintball like game except with laser guns, where they would simulate a gunight and thus simulate the killing of of other human beings. A German municipal order prohibited the simulated killings of other beings because it contravened the German constitutional principle of respect for human dignity. The CJEU held the fundamental constitutional such as human dignity and others such as the freedom of expression for example could indeed be relied upon by member states to defend measures that discriminate indirectly against simply restrict the ability of EU businesses to provide services member in another member state.
The strategic
objecive
Tacic 1: Provide very broad rights and freedoms for EU naionals to move, access, work, trade, establish, and provide services in other EU countries with no or few restricions as possible
Tacic 2: impose broad obligaions on EU member-states to not discriminate directly or indirectly or place any restricions that hinder or make free- movement more diicult or costly
Tacic 3: Restrict narrowly and strictly in the treaty the power of member states to defend openly discriminatory measures
Tacic 4: provide addiional grounds (on top of those provided in the treaty) through the case law of the CJEU for member-states to defend indirectly discriminatory measures
Remove all obstacles to intra-Community trade in order to merge the naional markets into a single market
The freedom of establishment and provision of services- derogations and public-interest justifications
Module: European Law (LW511)
University: University of Kent
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Students also viewed
- Citizenship and Fundamental Rights
- Citizenship and Fundamental Rights II
- Citizenship and Fundamental Rights III
- Fundamental Rights- The Initial Period of European Integration
- Fundamental Rights- Fundamental Rights as General Principles of EU Law
- Fundamental Rights- The Charter of Fundamental Rights of the EU
Related documents
- The freedom of establishment and provision of services- derogations and public-interest justifications
- The Free Movement of Services and Establishment- Rights and Obligations
- Free movement of workers- Article 45 and the equal treatment of migrant workers
- The Free Movement of Workers- derogations and public-interest justifications
- Free Movement of Goods II
- Free Movement of Goods I- Tariff Barriers (Introduction and Customs Duties)