Maria Wiberg

Contextual Understanding of the Services Directive

This chapter provides a contextual understanding of the Services Directive and its Articles 14, 15, 16 and 4(7), in light of the general evolution of the internal market and free movement of services. This is accomplished by drawing parallels between the degree of intergovernmental or supranational orientation of the Union, the institutional balance at the time being, the regulatory approach adopted within the Union and the Court’s conclusions in its case law.

New and Multi-Level Governance Within the Union

This chapter first explores the general understanding of the concept of new modes of regulatory governance in relation to the Union and its decision-making and implementation procedures as assumed here. Thereafter, three key modes of governance employed by the Union in facilitating the internal market are described: the Community Method signified by the ordinary legislative procedure, mutual recognition and the Open Method of Coordination, as being illustrative of the Union’s efforts to make progress in realising the internal market through different means of coping with different difficulties.

Scope and Effect as Defined by Restrictiveness and Justifications

This chapter examines what constitutes non-justified national restrictions in accordance with Articles 49, 56 and 52 TFEU in contrast with Articles 14 and 16 of the Services Directive. Firstly, an illustration is provided of the relationship between the detriment of a national restriction on transborder trade and the different sets of reasons that the Member States may rely on to justify such national restrictions. Secondly, an analysis is undertaken regarding the categorisation of national restrictive measures founded on their detriment to transborder trade. Third, an examination is conducted of what the range is of the possible justifications applicable to the different categories of national restriction and, finally, what is expressed in this context in the Services Directive.

Transposing the Services Directive

This chapter examines the provisions and characteristics of the Services Directive as well as its transposition and mutual evaluation processes introducing new instruments to achieve its objectives. The above is carried out not only by examining the Directive and other documents relevant to its understanding but also through a discussion of the implementation process in Sweden. This examination is based on the author’s own observations as well as interviews of individuals responsible for the implementation in light of the modes of governance utilised especially in transposing the Services Directive.

Scope of “Service Activities”

This chapter discusses what is viewed as “service activities” within the meaning of the Treaty and the Services Directive respectively. In this context, what is considered is how to distinguish national measures affecting “services” from that of “goods” and “persons”. Furthermore, service activities are also defined as being “provided for remuneration”. Also discussed is the fact that certain service activities are regulated specifically and, as such, are therefore not to be regulated under Article 53 TFEU, in accordance with which the Services Directive is adopted. In addition, certain service activities are exempted from the scope of the free movement of services generally. In light of this, the scope of the Services Directive may be contrasted with that of free movement as provided by the Treaty in the same respect.

Background to the Harmonisation of the Free Movement of Services

This chapter discusses the specific characteristics of the free movement of services in contrast with the other rights of free movement, since services are generally denoted by transborder movement of both a service as well as a person providing or receiving the service. This is furthermore illustrated in light of issues related to regulatory competition between the Member States and whether services are generally regulated in accordance with home or host-state control. Thereafter, the process leading up to the Services Directive is discussed in general. In this respect, it is described the initial proposal of the Services Directive, introducing the country-of-origin principle, as well as the finally adopted version in which that principle was abandoned.

Definition of “Measures” and “Requirements”

This chapter discusses the conceptual definitions of what constitutes a national “measure” within the meaning of Articles 49 and 56 TFEU, as opposed to what constitutes a “requirement” established in Article 4(7) of the Services Directive. A measure or a requirement is defined by the bodies or persons enacting such measure or requirement and what type of action it represents. Consequently, firstly the scope of Articles 49 and 56 TFEU is analysed in relation to what bodies or persons have enacted measures or requirements (personal scope). This is commenced by a discussion of the principle of “direct effect” within the meaning of Union law. This is the case since what is known as vertical direct effect may only be invoked between state parties and private parties while horizontal direct effect may also be invoked between two private parties. Thus, what is meant by state parties is examined and what is meant by private parties. Based on this discussion, the personal scope of Articles 49 and 56 TFEU is contrasted with that of Article 4(7) of the Services Directive. Secondly, the material scope of Articles 49 and 56 TFEU is examined by means of a discussion of the types of actions taken by those parties who must fulfil the obligations of Articles 49 and 56 TFEU falling within the ambit of the freedom to provide services or establishment in another Member State. The material scope of Articles 49 and 56 TFEU is then contrasted with that which is expressed in Article 4(7) of the Services Directive. Thirdly, a discussion is provided of the fields of law exempted from the regulatory competence of the Union which, nevertheless, must fulfil the requirements of Articles 49 and 56 TFEU and the fields of law exempted from the Services Directive. Finally, some concluding remarks are presented in relation to the personal and material scope of Articles 49 and 56 TFEU in contrast with Article 4(7) of the Services Directive.

The Services Directive as Legislative Tool

Since the Services Directive is adopted as a “directive”, imposing negative obligation on the Member States to “remove all requirements”, in this chapter, an illustration is provided of the general characteristics of directives as legislative tools within the meaning of Union law. Firstly, a brief discussion is provided of the legal basis established in the Treaty for adopting directives as legislative tools to harmonise the Member States rules and provide for a level playing field within the Union. Secondly, a presentation is made of the fact that there are different harmonisation models used in directives in order to realise the internal market. Thirdly, a description is provided of the requirements imposed on the Member States in implementing directives into national legislation and, finally, positive- and negative integration is explained in this respect.

Bases for Defining the Scope of Articles 49 and 56 TFEU and the Services Directive

In this chapter, the premises for defining the scope of Articles 49 and 56 TFEU as well as the Services Directive are briefly set out. This is because not all persons in all situations may rely on the right of free movement demarcated both by a territorial as well as personal scope. Discussed are, firstly, what persons may be considered beneficiaries of the free movement of services and establishment which are constituted by who is a national of a Member State? And, secondly, what defines internal matters to which Union law is not applicable?

Conclusion Part II

In this chapter, conclusions are drawn as to the discussion in Part II related to the legal positivist interpretation of the Services Directive and the question of whether it provides for undue modifications of previous interpretations of Articles 49, 56 and 52 TFEU. The discussion illustrates what constitutes a narrow interpretation or a wide interpretation of Articles 14 and 16 of the Services Directive, when contrasted with Articles 49, 56 and 52 TFEU. However, no matter whether the Services Directive is interpreted narrowly or widely, central constitutional issues arise, albeit different issues depending upon which interpretation prevails. These different constitutional issues are discussed in the final part of the chapter.