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Free Provision of Services

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Free Provision of Services . Agenda. Part I Introduction Challenges for Turkish companies European legal framework Part II Tackling internal market barriers Case studies. Introduction. Gross value added - EU 27. Source: EUROSTAT, OECD. Gross value added - Turkey . - PowerPoint PPT Presentation

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Page 1: Free Provision  of  Services

Free Provision of Services

Page 2: Free Provision  of  Services

Agenda

Part I Introduction Challenges for Turkish companies European legal framework

Part II Tackling internal market barriers Case studies

Page 3: Free Provision  of  Services

Introduction

Page 4: Free Provision  of  Services

Gross value added - EU 272%

20%

78%

Agriculture, hunting fishingIndustryServices, incl. construction

Source: EUROSTAT, OECD

Page 5: Free Provision  of  Services

Gross value added - Turkey

9%

22%

70%

Agriculture, hunting fishingIndustryServices, incl. construction

Source: EUROSTAT, OECD

Page 6: Free Provision  of  Services

Employment - EU 27

5%

27%

68%

Agriculture, hunting fishingIndustryServices, incl. construction

Source: EUROSTAT, OECD

Page 7: Free Provision  of  Services

Employment - Turkey

26%

26%

48%Agriculture, hunting fishingIndustryServices

Source: EUROSTAT, OECD

Page 8: Free Provision  of  Services

World Trade

World Exports

1980

World Exports

2008

World Imports

1980

World Imports 2008

0

5

10

15

20

25

0.43.7

0.43.52

16

2.1

16.4Spalte1Goods

Trillion USD

Source: WTO Trade Statistics

Page 9: Free Provision  of  Services

World Trade

Turkey Exports

1980

Turkey Exports

2008

Turkey Imports

1980

Turkey Imports 2008

0

50

100

150

200

250

0.634.4

0.5 16.12.9

132

7.9

202Spalte1Goods

Billion USD

Source: WTO Trade Statistics

Page 10: Free Provision  of  Services

Challenges for Turkey

Page 11: Free Provision  of  Services

State of play Accession negotiations started in October 2005

Screening completed

Important alignment needs Introduce freedom to provide services Right of establishment Mutual recognition of professional qualifications

Chapter suspended in December 2006

Page 12: Free Provision  of  Services

European Legal Framework

Page 13: Free Provision  of  Services

Internal MarketArea without internal borders in which thefree movement of goods, persons, servicesand capital is ensured in accordance with

ECTreaty (Art 14 EC Treaty)

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BasicsServices can be provided...

On a temporary basis - Freedom to provide services

(Art 49 et seqq ECT)

Stable continuous manner – Freedom of establishment (Art 43 et seqq ECT)

No general time limit

Case by case decision taking into account duration, regularity, periodicity and continuity

Page 15: Free Provision  of  Services

Basics

Cross border element needed

Precedence of Community law

Direct effect

Limits for public authorities and to some extend (collective) private action

State liability

Page 16: Free Provision  of  Services

Freedom to provide services Restrictions on freedom to provide services within

the Community are prohibited (Art 49 EC Treaty)

Beneficiary Service provider - EU-national established in

Community Service recipient – EU-national OR EU-resident Service itself

Page 17: Free Provision  of  Services

Service within the meaning of the EC Treaty

Cross border activity not covered by other freedom Posting of workers is covered by provision of services

Provided for remuneration (recipient/third party)

Temporary basis/absence of a stable and continuous participation in the host MS

Page 18: Free Provision  of  Services

V VV

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Freedom to provide services Foreigners to be treated as nationals - no

discrimination e.g. nationality, residence, language requirements

Abolition of any national restriction National measure liable to prohibit, impede or render

less advantageous the provision of a service (delays, additional costs)

Even if no discrimination between nationals and foreigners

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Prohibited restrictions

Bans (e.g. gambling) Obligation to have permanent

establishment/residence Requirement to obtain authorisation/registration Ban on setting up infrastructure (office, chamber) Minimum number of employees Compulsory registration/membership with

professional body More advantageous terms/prices for residents

Page 21: Free Provision  of  Services

Freedom of establishment Restrictions on freedom of establishment are prohibited

(Art 43 EC Treaty) Carry on an economic activity in a stable and

continuous manner in other MS

Right to open agencies, branches or subsidiaries

Right to set up and manage undertakings

Right to take up and pursue self-employed activities

Page 22: Free Provision  of  Services

Freedom of establishment

Beneficiary EU nationals Companies/firms formed in accordance with law

of a MS and having registered office/central administration/principal place of business within Community

Page 23: Free Provision  of  Services

Freedom of establishment Foreigners to be treated as nationals - no

discrimination e.g. nationality, residence, language requirements,

economic need tests

Abolition of any national restriction National measure liable to prohibit, impede or render

less advantageous the provision of a service (delays, additional costs)

Even if no discrimination between nationals and foreigners

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Prohibited restrictions Prohibition to have an establishment in more than

one MS Restrictions to choose between principal/secondary

establishment Involvement of competitors in authorisation

decisions Insurance from national company Quanatitative restrictions Specific legal form One office rule Minimum number of employees

Page 25: Free Provision  of  Services

Grounds for justification I Activities directly/specifically connected with the

exercise of official authority (Art 45 ECT)

Grounds of public policy, public security or public health (Art 46 ECT)

May justify (non) discriminatory restrictions

Page 26: Free Provision  of  Services

Grounds for justification II

Imperative requirements in the general interest (ECJ) e.g. consumer protection, protection of workers, road

safety, environmental protection, financial balance of of health system

No harmonisation Suitable for securing overriding requirements relating

to public interest Not go beyond what is necessary (provision of

services vs. establishment)

May justify only non-discriminatory restrictions

Page 27: Free Provision  of  Services

Recognition of Professional Qualifications

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Recognition of Professional Qualifications

MS free to require qualifications

Qualifications acquired in other MS have to be recognised

Directive 2005/36/EC

Different requirements for Service provision (temporary and occasional) Establishment (permanent business)

Page 29: Free Provision  of  Services

Recognition of Professional Qualifications

Service Provision: profession regulated in home MS: immediate

service provision

profession not regulated in home MS: 2 years experience during precedent 10 years needed

public health and safety implications: additional checks/requirements possible

Page 30: Free Provision  of  Services

Recognition of Professional QualificationsService Provision

Written declaration in advance may be required

Documents needed: Proof of nationality and legal establishment in MS to

legally pursue activity Evidence of professional qualification/2 years

experience

No registration with or membership of professional organisation, excepted pro forma membership

No registration with public social security body

Page 31: Free Provision  of  Services

Recognition of Professional Qualifications

Establishment: General system: mutual recognition of

diplomas, certificates, attestations; aptitude tests and adaptation periods possible

Recognition of experience: most crafts and trade professions covered; proof of experience and training leads to recognition

Specific automatic recognition: medical professions

Page 32: Free Provision  of  Services

Everything is perfect?

Many problems/obstacles remain

Internal Market in services is key for Lisbon Agenda

Only 20% of trade in the Internal Market

Page 33: Free Provision  of  Services

Services Directive

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Objectives

Establish a genuine Internal Market in Services

Legal Security

Economic Growth and Job Creation

No liberalisation of SGEI, no privatisation of public entities

Page 35: Free Provision  of  Services

Scope I “All” services covered

Directive does not cover: Non-economic services of general interest, financial services,electronic communications services, transport services,

temporarywork agencies, healthcare services, audiovisual services,

gambling,official authority, social services, private security services,

notaries,taxation

Page 36: Free Provision  of  Services

Scope II

Private International Law unchanged

Labour Law (Posting of Workers Directive) unchanged Compliance with core conditions of work of the host MS Prior notification of posting may be required

Recognition of professional qualifications unchanged

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Administrative Simplification

Simplification of procedures

Points of single contact Right to information Complete all procedures /formalities needed

Procedures by electronic means

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Freedom of establishment

Permanent change to other MS Authorisation may be required, if:

Non discriminatory, necessary, proportionate Transparent and predictable criteria and procedures No duplication of requirements

Prohibited requirements e.g. Nationality, residence, economic need test

Requirements to be evaluated e.g. Quantitative/territorial restrictions, minimum number of

employees, fixed minimum and/or maximum tariffs

Page 39: Free Provision  of  Services

Free movement of services Temporary and occasional work in other MS Country of origin principle changed into „principle

of non obstruction“ Requirements only if

Non-discrimination Necessity (public policy/security/health, environment) Proportionality Safeguard clause

Black list (e.g. establishment, authorisation, ban on infrastructure, equipment)

Screening

Page 40: Free Provision  of  Services

Limited Harmonisation

Information obligations on providers (name, contact details, authorisation, after-sales guarantee, price/main features of the service,…)

Professional liability insurance and guarantees

Measures to promote service quality (certification, quality charter, standards, settlement of disputes)

Page 41: Free Provision  of  Services

Administrative cooperation

Obligation to cooperate

Information exchange and mutual assistance

Supervision by MS best placed

Internal Market Information System

Page 42: Free Provision  of  Services
Page 43: Free Provision  of  Services

The Directive is …

No revolution Social, labour, environmental standards

maintained and quality secured

Value Added – less bureaucracy, less barriers, more legal security

Unsolved

Enforcement of administrative decisions Control measures for posted workers

Page 44: Free Provision  of  Services

Tackling internal market barriers

Page 45: Free Provision  of  Services

Content

1. Introduction

2. Tools to fight internal market problems

3. Conclusions

Page 46: Free Provision  of  Services

Introduction

99,6% of WKÖ members are SMEs

89,8% of WKÖ members are micro enterprises

59% Export Quota

EU market is essential for Austria and its SMEs

Page 47: Free Provision  of  Services

Introduction Well functioning of Internal Market priority for WKÖ

Lobbying (Services Directive, Mutual Regonition,...)

Support services for Members

Enterprise Europe Network within EU-Department Provides information, analysis and support about 290 requests/year related to Internal

Market some 50 Internal Market Problems

SMEs need fast, cheap and reliable solutions

Page 48: Free Provision  of  Services

Tools

Page 49: Free Provision  of  Services

Preventing Obstacles - Notification Procedure Directive 98/34/EC MS have to notify draft technical regulations

relating to products and information society services before adoption

Technical regulation not notified cannot be applied

Commission and MS can examine draft during standstill periods

Business organisations can raise objections via EC/MS

Deatailed opinion extends of standstill period Solutions for 95% of cases

Page 50: Free Provision  of  Services
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31. Kuala Lumpur32. Lagos33. Ljubljana34. Lisbon35. London36. Los Angeles37. Madrid38. Milan39. Manila40. Mexico41. Montreal42. Moscow43. Munich44. New Delhi45. New York

16. Casablanca17. Chicago18. Damascus19. Den Haag20. Dublin21. Frankfurt22. Helsinki23. Hong Kong24. Istanbul25. Jakarta26. Jeddah27. Johannesburg28. Cairo29. Kiev30. Copenhagen

1. Abu Dhabi 2. Algiers 3. Amman 4. Ankara 5. Athens 6. Bagdad 7. Bangkok 8. Barcelona 9. Belgrade10. Berlin 11. Brussels12. Budapest13. Buenos Aires14. Bucharest15. Caracas

46. Oslo47. Padua48. Paris49. Peking50. Prague51. Bratislava52. Santiago53. Sao Paulo54. Sarajevo55. Seoul56. Shanghai

57. Singapore58. Sofia59. Stockholm60. Strasbourg61. Sydney62. Taipei63. Teheran64. Tel Aviv65. Tokyo66. Toronto67. Tripoli68. Warsaw69. Zagreb70. Zürich

Austrian Trade Commissions

Foreign Trade Commissions – Bilateral Interventions

Page 52: Free Provision  of  Services

SOLVIT Incorrect application of EU rules by MS

administration causing roblems for EU citizens with cross border element

Network of 30 SOLVIT centres (EEA)

Informal and pragmatic approach – no legal obligation to find solution

Free of charge

10 weeks deadline

Page 53: Free Provision  of  Services

SOLVIT

National authority Citizen or company

HomeSOLVIT centre

Lead SOLVIT centre

Negotiate possible solutions

Co-operate to find the solution

Define problem and discuss the solution

Country A Country B

How does it work?

Page 54: Free Provision  of  Services

SOLVIT

Tackle Internal Market Barriers Trade Commissions SOLVIT Infringement Procedures Interactive Policy Making (SME Panels, SME feedback)

Page 55: Free Provision  of  Services

Parliamentary Questions To increase pressure

Written questions may be put by any Member to the Council or Commission

Answered within six weeks non-priority)/ three weeks (priority)

Page 56: Free Provision  of  Services

Infringement Procedure Lodge complaint with EC if MS violates EC-law

EC may open infringement procedure and bring case before ECJ

MS obliged to comply with ECJ ruling

Procedure may take several years

Page 57: Free Provision  of  Services

Conclusions SME stronger affected by internal market

barriers

Business Organisation‘s support helpful and needed

Existing tools are valuable but not perfect

Page 58: Free Provision  of  Services

Thank you!Markus StockAustrian Federal Economic [email protected]