Considerations on COM(2016)823 - Legal and operational framework of the European services e-card introduced by Regulation …[ESC Regulation]…

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This page contains a limited version of this dossier in the EU Monitor.

 
 
(1) The Treaty on the Functioning of the European Union (TFEU) guarantees service providers the freedom of establishment in Member States and the freedom to provide services across Member States.

(2) Directive 2006/123/EC of the European Parliament and of the Council 17 establishes general provisions facilitating the exercise of the freedom of establishment for service providers and the free movement of services. It provides inter alia that Member States should provide for administrative simplification, for instance offering electronic procedures via Points of Single Contact, simplifying existing procedures and the need for certified documents and making best use of a system of tacit approval. The Directive also sets a framework furthering the freedom to provide services on a temporary basis in another Member State.

(3) Directive 2006/123/EC requires Member States to put in place and keep constantly updated Points of Single Contacts where a service provider wishing to establish or to provide services can find all relevant information about requirements to be complied with and e-procedures in respect of all formalities, authorisation and notifications to go through. However, costly information challenges and difficulties complying with national procedures at a distance remain to date for service providers, namely for sector-related requirements. Cooperation between authorities in different Member States should in principle take place via the Internal Market Information System (IMI), an IT-platform offered for cross-border exchange of information and mutual assistance under that Directive. Despite the fact that authorities sometimes have doubts with regard to the legal establishment of a provider in another Member State, the possibilities for cooperation currently provided in IMI are not exploited to their full potential. Formalities associated with authorisations and notifications often require paper documents to be submitted and to be translated at a significant cost. Information regarding these obstacles is either not available online or is scarce, incomplete, dispersed and difficult to interpret in relation to the particular circumstances of a provider expanding across borders, as national rules often target purely domestic situations. Service providers often risk resubmitting information and documents.

(4) Requirements remain in place which make expansion of service providers' operations across the internal market burdensome and unappealing, such as multiple and disparate authorisation schemes before different authorities, which, regarding establishment, fail to achieve mutual recognition of conditions previously complied with in other Member States or, regarding temporary cross-border provision of services apply disproportionate or unjustified restrictions. As a consequence, service providers face multiple and disproportionate compliance costs when going cross-border.

(5) Cross-border trade and cross-border investment in certain business and construction services are particularly low showing a potential for better integration of services markets with significant negative repercussions for the remaining part of the economy. This underperformance leads to situations where the potential for more growth and jobs in the Single Market has not been fully exploited.

(6) This Directive aims to facilitate the establishment and the free movement of services within the single market, further developing and implementing the general principles of right of establishment and freedom to provide cross-border services enshrined in Articles 49 and 56 TFEU, respectively, as well as in Directive 2006/123/EC. It should be based on Article 53(1) TFEU, concerning freedom of establishment and access to self-employed activities, as well as on Article 62 TFEU, which makes that provision applicable to services.

(7) In order to make it easier to take up and pursue service activities, this Directive builds upon Directive 2006/123/EC but does in no way amend its rules. The scope of this Directive is even more limited compared to the scope laid down in the Services Directive. It specifically targets business and construction service sectors, where many obstacles to cross-border activities still remain. In addition, cross-border trade and investment in construction and several business services are low and both sectors have seen weak productivity growth over the last decade.

(8) All matters, activities and fields excluded from the scope of Directive 2006/123/EC should remain excluded from the scope of this Directive. In particular, this Directive does not affect matters, activities and fields such as those deriving from taxation, social security and labour law, including any legal or contractual provision concerning employment conditions, working conditions, including health and safety at work and the relationship between employers and workers. Equally this Directive does not affect the social security legislation of the Member States. This Directive is also without prejudice to any provision stemming from competition law as well as any rule on the applicable law or jurisdiction pursuant to private international law.

(9) For reasons of coherence, possible conflicts between the present Directive and other EU acts governing specific aspects of access to or exercise of a service activity in a specific sector should be solved as provided for in Article 3 of Directive 2006/123/EC for conflicts between that Directive and such acts, with the application of those other acts. As a result, the provisions in the present Directive cannot be relied upon in order to justify prior authorisation schemes, prior notification schemes or establishment requirements which are prohibited by other EU acts governing specific aspects of access to or exercise of a service activity in a specific sector such as Directive 2000/31/EC of the European Parliament and of the Council 18 . As a further result, this Directive does in no way affect the obligations service providers should respect in accordance with Directive 96/71/EC of the European Parliament and of the Council 19 and Directive 2014/67/EU of the European Parliament and of the Council  20

(10) This Directive clarifies the conditions under which service providers concerned can benefit from the European services e-card introduced by Regulation …[ESC Regulation]…, which respective role the home and the host Member State should have and which actions of the home Member State should be accepted by a host Member State. The European services e-card is a voluntary instrument for the service provider.

(11) This Directive also includes a framework for the validity and the reasons for suspending or revoking a European services e-card throughout the European Union. Whenever a service provider cannot legally continue to provide services across borders, the reason for which it initially applied for an e-card, that same e-card should be suspended or revoked, accordingly.

(12) The main purpose of the European services e-card is to introduce a uniform and simplified procedure for service providers wishing to expand provision of services across internal market borders. The e-card represents an electronic certificate stating that a service provider is legally established in a Member State (the home Member State). Host Member States where a service provider is interested in expanding to should furthermore not apply, to holders of an e-card, their prior authorisation or notifications schemes put in place under national law to control access to or exercice of service activities, which is already the object of control before issue of a European services e-card.

(13) The procedure introduced by this Directive seeks to implement general rules and principles of Directive 2006/123/EC in the context of cross-border establishment and temporary provision of certain services.

(14) Certain requirements and related authorisations and notifications governed by Directive 2006/123/EC should not be the object of controls in the context of issuing a European services e-card given their complexity or the involvement of third actors which the uniform procedural workflow of the European services e-card cannot suitably accommodate. This concerns selection procedures for granting authorisations limited in number and controls of site-specific conditions, be it for the site of actual provision of services or for the site where the provider establishes its operations. Similarly a European services e-card is also not suited to accommodate selection procedures for the performance of public contracts, design contests or concessions.

(15) In the same vein, controls applicable to service providers which are already the object of other horizontal EU legislation should remain excluded. This is the case of requirements and controls related to recognition of professional qualifications under Directive 2005/36/EC of the European Parliament and of the Council 21 , even if mentioned in sector-specific legislation.

(16) Furthermore, the requirements for service providers who are limited liability companies to disclose certain company information according to Directive 2009/101/EC of the European Parliament and of the Council 22  and Council Directive 89/666/EEC 23 , and any requirements or controls imposed by national rules on registration of branches of companies registered in another Member State under company law should not be covered by a European services e-card procedure, which is meant to address sector-specific matters in the framework of Directive 2006/123/EC.

(17) A European services e-card provides several advantages. It offers a proof of legal establishment in the home Member State. As long as a European services e-card remains valid, it should constitute a valid means of proof throughout the EU of legal establishment in the home Member State for the services covered by that e-card. Such proof should even be accepted in a domestic context, across all levels and administrative divisions of public administration. A valid European services e-card includes information which is often required in different contexts, such as controls applicable during or after the performance of services, the award of a public contract, a design contest or a concession, formation of subsidiaries or registration of branches under company law and registration of the service provider with mandatory social insurance schemes. Since that information is already available in a valid European services e-card, Member State authorities should not request this information from e-card holders for these other purposes.

(18) In addition, Member States should not be allowed to impose on holders of a European services e-card any service provision related authorisation or notification schemes prior to a service provision. Member States should not repeat, wholly or partially, controls previously performed in the context of issuing the European services e-card once provision of services has started in the host Member State. Authorisation or notification schemes such as those deriving from taxation, social security and labour law shall remain applicable as such matters are excluded from the scope of this Directive. Ex-post checks, inspections and investigations initiated by competent authorities should however remain admissible to control service performance, as under current EU Law. If such controls reveal serious breaches of requirements applicable in a host Member State, this could lead to the suspension or revocation of the European services e-card.

(19) Directive 2013/55/EU, of the European Parliament and of the Council, of 20 November 2013 24 introduced a legislative framework for the European professional card, meant to grant to professionals who obtain the right to pursue the same profession for which they previously established in a (home) Member State in another (host) Member State, either temporarily or through a secondary establishment. The European services e-card, as a procedure meant for a wide variety of services and not addressing issues related to professional qualifications, should thus not apply to those services for which a specific European professional card was introduced, except if sector-specific requirements and their controls, unrelated to recognition of professional qualifications, are left in place for secondary establishment of a particular profession.

(20) In order to concentrate actions and decisions within a Member State and facilitate cooperation between different competent authorities in home and host Member States, a coordinating authority in the home Member State and in the host Member State should ultimately be responsible for handling issues related to the European services e-card, thus coordinating the input from the different competent national authorities and acting as a contact point with its counterparts in other Member States. The application for a European services e-card should thus be submitted to the coordinating authority of the home Member State.

(21) There are two types of European services e-cards offered to service providers: a simpler procedure for temporary cross-border provision of services into other Member States, essentially controlling their previous establishment in the home Member State and allowing a host Member State to object to temporary provision of cross-border services only due to overriding reasons of public interests, and a more complex one, framing the control by host Member States of an economic activity in their territory for an indefinite period through secondary establishment in the form of branches, agencies or offices, in order to ensure, in a simplified workflow, mutual recognition is performed properly and expeditiously.

(22) The European services e-card is available to providers previously established in a Member State. While subsidiaries of companies from third countries should be able to apply for an e-card, branches, agencies or offices of such companies should not, in accordance with Article 48 of the TFEU which reserves freedom of establishment and free movement of services to companies and firms constituted in accordance with the laws of a Member State and having their registered office, central administration or principal place of business within the Union.

(23) The European services e-card for secondary establishment should allow for provision of services in the host Member State through branches, agencies but also any form of office located in its territory. However, for the purposes of the European services e-card, secondary establishment should not include provision of services in the host Member State through subsidiaries of companies established in the home Member State. The fact that a subsidiary is a separate legal entity requires more complex controls than those pertaining to provision of services through a branch, agency or office without separate legal personality. The European services e-card procedure is not suited to cover those complex controls.

(24) The coordinating authority of the home Member State should, upon receiving an application for a European services e-card, complete it and validate its contents in order to accurately demonstrate legal establishment of the provider in its home Member State and describe its circumstances in a manner conducive for host Member State's authorities to pursue their own controls. While inaction on the part of the applicant should lead to a halt in the procedure, inaction on the part of the home Member State's authorities should give way to judicial redress.

(25) In order to ensure uniform implementation of this Directive in relation to the technical aspects of handling and processing applications for European services e-cards, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council 25 . These implementing rules should determine the automatic cancellation of an application for a European services e-card if the respective procedure is suspended for a considerable lapse of time due to inaction on the part of the applicant.

(26) A coordinating authority of the host Member State should provide clarity as to which requirements apply to the incoming service provider, considering the latter is already established in another Member State. The coordinating authority of the host Member State should ensure the provider knows which requirements govern performance of services in the host Member States, including those applicable once it obtains the European services e-card. For establishment, i.e., provision of services through branches, agencies or offices, the identification of applicable requirements by the coordinating authority of the host Member State fulfils a different purpose: it lists the requirements the compliance of which the incoming service provider is required to prove before the e-card can be issued.

(27) In case a host Member State has put in place a comprehensive and updated information database in its point of single contact, its coordinating authority can simply refer to the relevant webpage from where the information can be retrieved in the context of the European services e-card procedure.

(28) A European services e-card should not alter the current regulatory environment, under Directive 2006/123/EC and other EU legislation concerned, setting the underlying conditions which a service provider must meet when starting to provide services in a host Member State. Consequently, host Member States should be able, in accordance with current EU Law, to have consideration for compliance with their own requirements by incoming providers before these are allowed to start provision of services in their territory. The procedure for issuing a European services e-card should thus account for a suitable role of control by the host Member State both for temporary cross-border provisions and for establishment.

(29) For provision of temporary cross-border services, given that Article 16 of Directive 2006/123/EC admits requirements for the generality of services covered by this Directive, host Member States should be allowed to object to the issue of a European services e-card by the home Member State in those cases where the circumstances of the applicant give rise to genuine and sufficiently serious threats to public interests related to public policy, public security, public health or the protection of the environment, in a manner which cannot be suitably and sufficiently addressed by requirements and controls applicable once service provision starts. This should be the case when a prior authorisation scheme or prior notification for temporary provision of the services in question is in place, justified in proportionate terms under one of those four overriding reasons of public interest safeguarded under Article 16 of Directive 2006/123/EC and when the conditions met by the applicant in its home Member State cannot be considered equivalent to the ones required in the host Member State for the granting of that prior authorisation. The possibilities and prerrogatives of host Member States under Article 16 of Directive 2006/123/EC apply in the context of issuing a European services e-card.

(30) IMI should enable the Commission to become aware of objections raised by host Member States before the issue of European services e-card procedures for temporary cross-border provision of services, in the context of prior authorisation or prior notification schemes that should also have been previously notified under Directive ………[forthcoming Notification Directive]…….. This information on the effective application of the notified authorisation schemes may be used by the Commission to trigger any enforcement action or to launch any enquiries. It is without prejudice to the rights of applicants to submit a complaint to Commission services alleging a potential breach of EU law by way of the objection in question.

(31) For establishment, host Member States should be allowed to impose on e-card applicants their own requirements, non-discriminatory, justified under overriding reasons of public interest and proportionate in compliance with Directive 2006/123/EC and other EU legislation concerned. Sector-specific EU legislation governing certain services covered by this Directive, such as services of travel agencies under Directive (EU) 2015/2302, of the European Parliament and of the Council 26 , and services of installation of energy-related building elements under Directive 2012/27/EU of the European Parliament and of the Council 27 , in so far as the controls do not pertain to recognition of professional qualifications in the framework of Directive 2005/36/EC, should be taken into consideration.

(32) Equivalence between requirements of a host Member State and those requirements of the home Member State the applicant has already complied should be an integral part of this assessment. In order to facilitate the assessment of the equivalence of requirements in home and host Member States, where the authority of the host Member State declares its intention to refuse an e-card for establishment, the applicant should have a renewed possibility to prove that it meets the conditions laid down in the prior authorisation or prior notification on the basis of which the authorities of the host Member States base their intention to refuse the e-card, including through requirements to which the applicant is subject in the home Member State and which they deem to be equivalent.

(33) Host Member States should be allowed to request clarifications or additional information from the home Member State before the issue of a European services e-card, essentially relevant for the assessment of whether there is a justified and proportionate need to object to temporary provision of services by the applicant in its territory or, for establishment, to assess just how many of its regulatory concerns are already suitably addressed by compliance of the applicant with home Member State's requirements. Over time, it is expected that Member States will gain a better knowledge of their respective regulatory frameworks in the sectors covered by the e-card that should lead to enhanced mutual trust and thus allow for a more expedient assessment to the benefit of applicants.

(34) In order to lay down the procedure for requesting such information, the power to adopt acts in accordance with Article 290 of the Treaty should be delegated to the Commission in respect of specifying the procedural workflow and its impact on the applicable time-limits for decisions to be made in the context of issuing a European services e-card. It is of particular importance that the Commission carries out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement on Better Law-Making of 13 April 2016. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(35) The host Member State should no longer control whether the applicant for a European services e-card is legally established in another Member State. Nor should it put into question the veracity and validity of the data and documents included in an application, once validated by the coordinating authority of the home Member State. Conversely, the coordinating authority of the home Member State should not assess whether it issues a European services e-card for temporary cross-border provisions of services based on compliance by the provider of host Member State requirements, rather it should only assess of whether the applicant is legally established in its territory for the provision of the service in question at the time the decision to issue is made.

(36) Relevant actions and decisions of the coordinating authorities involved in the procedure for issuing the European services e-card, in the host as well as in the home Member State should be subject to judicial remedies in accordance with national law. This should include appropriate remedies in the event of failure to act of the coordinating authority in the home Member State in accordance with the procedure to issue the e-card.

(37) Prior to the issuance of the European services e-card, a host Member State should be allowed to invoke legitimate policy concerns. Nevertheless, in the interest of allowing for a simplified and swift procedure, the principle of tacit approval should be observed in issuing a European services e-card. That is the general principle introduced under Directive 2006/123/EC. An alert of impending tacit approval and the extension of the applicable deadlines by two additional weeks should ensure that the host Member State has the appropriate time and means to consider applications for a European services e-card. A lack of information from the host Member State on applicable requirements should also not impede automatic issue of a European services e-card.

(38) Service providers should not be required to provide information and documents which are already in the possession of other authorities in the home Member State, irrespective of administrative levels or divisions. It should also be the case when interconnection of national registers (e.g. central, commercial and companies' registers as required by Directive 2009/101/EC or insolvency registers under Regulation (EU) 2015/848 of the European Parliament and of the Council  28 ) allows for information and documents to be retrieved by the administration of the home Member State from other Member States. In all instances when personal data are processed under this Directive, rules on protection of personal data of Directive 95/46/EC of the European Parliament and of the Council 29 [, Regulation (EU) 2016/679 of the European Parliament and of the Council 30 ] and national legislation should be observed.

(39) A service provider should be allowed to apply for a European services e-card in the home Member State and have that application assessed by the host Member State regarding the applicable conditions to provide services through a branch in the territory of that host Member State before that applicant is required to apply for registration of the future branch in that same host Member State. Thus, the applicant will be certain of the applicable sector-specific conditions and ultimately that it complies with them in a manner satisfactory to the host Member State before spending time and resources on requesting the registration of a branch in that host Member State for company law purposes. At the same time, the applicant will need to comply with national rules on registration of branches under company law to provide services through such a branch in compliance with EU law.

(40) A European services e-card should allow for provision of services throughout the territory of the host Member State. A service provider, once established in a Member State in the form of a branch, agency or office, should not, in principle, need to apply for another e-card in order to expand provision of services already covered by the existing e-card domestically through additional branches, agencies or offices there, as the case may be. However, as Directive 2006/123/EC expressly provides for, authorisations for each individual branch, agency or office may be justified by overriding reasons of public interest. In that case, service providers should continue to have the choice of expanding operations domestically by obtaining those authorisations under national law or applying for additional European services e-cards, for each additional branch, agency of office, as the case may be.

(41) This Directive should not interfere with the division of regional or local competences within the Member States, including regional and local self-government. This notwithstanding, administrative cooperation between different national authorities within strict time-limits may be necessary in order to meet the obligations laid down in the Directive. In order to help Member States meet their obligations and considering the decentralised structure of many of them, IMI could also be used as a tool for the effective exchange of information and mutual assistance between competent authorities within a certain Member State, without prejudice to other solutions put in place by Member States.

(42) A European services e-card should be valid for an indefinite period in time, without prejudice to, in relation to temporary cross-border services, the effects of case-by-case derogations in accordance with Directive 2006/123/EC.

(43) A European services e-card should however be suspended by the issuing coordinating authority if, temporarily, the service provider is banned from providing the services in question. The suspension should last as long as the ban is in place. A European services e-card should be revoked by the issuing coordinating authority if the conditions for issuing it or for it to remain valid, as a testament of legality of service provision in the host Member State, are no longer met. A final decision establishing that an e-card holder misrepresented him or herself as a service provider and that, under national law of either home or host Member State he or she is considered to be a worker, should lead to the revocation of the European services e-cards in question. Similarly, cases of fraudulent, inaccurate or falsified information or documents used in the context of issuing a European services e-card should impact the validity of the e-card.

(44) Administrative cooperation between home and host Member State authorities should ensure observance of conditions of validity of a previously issued European services e-card. To further ensure no European services e-card misrepresents the situation of its holder at any given moment, its holder and competent authorities should be obliged to inform the coordinating authority who issued it of changes in the situation of the holder which may impact the validity of the e-card.

(45) In any case, before adopting the decision to revoke or suspend the e-card, the competent coordinating authority should consult the e-card holder and any decision should be duly justified and subject to appeal, in accordance with the applicable national law of the Member State which issued it. Interim measures signalling a pending procedure for suspension or revocation of a European services e-card should be allowed, signalling a link with alerts triggered under Directive 2006/123/EC.

(46) In order to ensure uniform conditions for the implementation of this Directive in relation to the technical aspects of processing suspensions, revocations and cancelations of European services e-cards, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council.

(47) The application of this Directive should be monitored and assessed in order to determine its impact on the costs of expanding operations cross-border, particularly in relation to service providers, on consumer perception regarding such providers, particularly those holding a European services e-card, and on competition, prices and quality of services. The effects of the provisions contained in this Directive should be evaluated regularly, in particular in order to assess whether it would be appropriate to introduce a European services e-card for other service activities. This monitoring will take place in cooperation with Member States, social partners and other relevant stakeholders.

(48) Since the objectives of this Directive cannot be sufficiently achieved by the Member States in view of the complexity and inconsistency of approaches of controlling certain services across Member States but can rather, by reason of enhanced administrative coordination across the Union, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives.

(49) This Directive respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. In particular, this Directive, through the establishment of the legal and operational framework for the European Service e-card and the coordination of some requirements concerning the freedom of establishment and the provision of services for certain service, seeks to promote the rights of establishment and the right to provide services in any Member State, preventing any discrimination on grounds of nationality and ensuring impartial, fair and reasonably speed procedure, in accordance with Articles 15, 21 and 41 of the Charter of Fundamental Rights of the European Union, while ensuring full respect of the protection of personal data, including in accordance with Regulation (EC) No 45/2001 of the European Parliament and of the Council 31 , Directive 95/46/EC [Regulation (EU) No 2016/679], and giving due consideration to the risk of abuse of rights provided for respectively in Articles 8 and 54 of that Charter.