Unión Europea

L 376/36 EN Official Journal of the European Union 27.12.2006

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 and Social Committee (1),

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

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

Whereas:

(1) The European Community is seeking to forge ever closer links between the States and peoples of Europe and to ensure economic and social progress. In accordance with Article 14(2) of the Treaty, the internal market comprises an area without internal frontiers in which the free move- ment of services is ensured. In accordance with Article 43 of the Treaty the freedom of establishment is ensured. Article 49 of the Treaty establishes the right to provide services 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 integration of the peoples of Europe and to promote balanced and sustainable economic and social progress. In eliminating such barriers it is essential to ensure that the development of service activities contributes to the fulfilment of the task laid 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 of employment and of social protection, equality between men and women, sustainable and non-inflationary growth, a high degree of competitiveness and convergence of economic performance, a high level of protection and improvement of the quality of the environment, the raising of the standard of living and quality of life and economic and social cohesion and solidarity among Mem- ber States.

(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 yet published in the Official Journal), Council Common Position of 24 July 2006 (OJ C 270 E, 7.11.2006, p. 1) and Position of the European Parliament of 15 November 2006. Council Decision of 11 December 2006.

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

(3) The report from the Commission on ‘The State of the Internal Market for Services’ drew up an inventory of a large number of barriers which are preventing or slowing down 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 a decade 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 as experienced by European citizens and providers. The bar- riers affect a wide variety of service activities across all stages of the provider’s activity and have a number of common features, including the fact that they often arise from administrative burdens, the legal uncertainty associ- ated with cross-border activity and the lack of mutual trust between Member States.

(4) Since services constitute the engine of economic growth and account for 70 % of GDP and employment in most Member States, this fragmentation of the internal market has a negative impact on the entire European economy, in particular on the competitiveness of SMEs and the movement 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 sector is a key employment sector for women in particular, and that they therefore stand to benefit greatly from new opportunities offered by the completion of the internal market for services. The European Parliament and the Council have emphasised that the removal of legal barri- ers to the establishment of a genuine internal market is a matter of priority for achieving the goal set by the Euro- pean Council in Lisbon of 23 and 24 March 2000

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of improving employment and social cohesion and achiev- ing sustainable economic growth so as to make the European Union the most competitive and dynamic knowledge-based economy in the world by 2010, with more and better jobs. Removing those barriers, while ensuring an advanced European social model, is thus a basic condition for overcoming the difficulties encoun- tered in implementing the Lisbon Strategy and for reviv- ing the European economy, particularly in terms of employment and investment. It is therefore important to achieve 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 and barriers to the free movement of services as between Mem- ber States and to guarantee recipients and providers the legal certainty necessary for the exercise in practice of those two fundamental freedoms of the Treaty. Since the barriers 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 another Member State without being established there, it is neces- sary to enable providers to develop their service activities within the internal market either by becoming established in a Member State or by making use of the free move- ment of services. Providers should be able to choose between those two freedoms, depending on their strategy for growth in each Member State.

(6) Those barriers cannot be removed solely by relying on direct 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 the Member States concerned would, especially following enlargement, be extremely complicated for national and Community institutions, and, on the other hand, the lifting of many barriers requires prior coordination of national legal schemes, including the setting up of admin- istrative cooperation. As the European Parliament and the Council 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 which benefits a wide variety of services while taking into account the distinctive features of each type of activity or profession and its system of regulation. That framework is based on a dynamic and selective approach consisting in the removal, as a matter of priority, of barriers which may 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 make possible the progressive and coordinated modernisation of national regulatory systems for service activities which is vital 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 of codes of conduct on certain issues. That coordination of national legislative regimes should ensure a high degree of Community legal integration and a high level of pro- tection of general interest objectives, especially protection of consumers, which is vital in order to establish trust between Member States. This Directive also takes into account other general interest objectives, including the protection of the environment, public security and public health 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 the activities in question are open to competition, so that they do not oblige Member States either to liberalise services of general economic interest or to privatise public entities which provide such services or to abolish existing monopolies for other activities or certain distribution services.

(9) This Directive applies only to requirements which affect the 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 as administrative penalties imposed for non-compliance with such rules which do not specifically regulate or specifi- cally affect the service activity but have to be respected by providers in the course of carrying out their economic activity in the same way as by individuals acting in their private capacity.

(10) This Directive does not concern requirements governing access to public funds for certain providers. Such require- ments include notably those laying down conditions under which 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 social services.

(11) This Directive does not interfere with measures taken by Member States, in accordance with Community law, in relation to the protection or promotion of cultural and linguistic diversity and media pluralism, including the funding thereof. This Directive does not prevent Member States from applying their fundamental rules and prin- ciples relating to the freedom of press and freedom of expression. This Directive does not affect Member State laws prohibiting discrimination on grounds of nationality or on grounds such as those set out in Article 13 of the Treaty.

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(12) This Directive aims at creating a legal framework to ensure the freedom of establishment and the free movement of services between the Member States and does not harmo- nise or prejudice criminal law. However, Member States should 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 activity in circumvention of the rules laid down in this Directive.

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

(14) This Directive does not affect terms and conditions of employment, 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 at work, which Member States apply in compliance with Community law, nor does it affect relations between social partners, 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 practices which respect Community law, nor does it apply to ser- vices provided by temporary work agencies. This Direc- tive does not affect Member States’ social security legislation.

(15) This Directive respects the exercise of fundamental rights applicable in the Member States and as recognised in the Charter of fundamental Rights of the European Union and the accompanying explanations, reconciling them with the fundamental freedoms laid down in Articles 43 and 49 of the Treaty. Those fundamental rights include the right to take industrial action in accordance with national law and practices which respect Community law.

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

(17) This Directive covers only services which are performed for an economic consideration. Services of general inter- est are not covered by the definition in Article 50 of the Treaty and therefore do not fall within the scope of this Directive. Services of general economic interest are ser- vices that are performed for an economic consideration and 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, are excluded from the scope of this Directive and certain other services of general economic interest, for example, those that may exist in the area of postal services, are the sub- ject of a derogation from the provision on the freedom to provide services set out in this Directive. This Directive does not deal with the funding of services of general eco- nomic interest and does not apply to systems of aids granted by Member States, in particular in the social field, in accordance with Community rules on competition. This Directive 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 of this Directive since these activities are the subject of spe- cific Community legislation aimed, as is this Directive, at achieving a genuine internal market for services. Conse- quently, t his exclusion should cover all financial services such as banking, credit, insurance, including reinsurance, occupational or personal pensions, securities, investment funds, payments and investment advice, including the ser- vices listed in Annex I to Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (1).

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

(20) The exclusion from the scope of this Directive as regards matters of electronic communications services as covered by Directives 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and inter- connection of, electronic communications networks and associated facilities (Access Directive) (2), 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic commu- nications networks and services (Authorisation Direc- tive) (3), 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework 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.

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services (Framework Directive) (1), 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services (Universal Service Directive) (2) and 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the pro- cessing of personal data and the protection of privacy in the electronic communications sector (Directive on pri- vacy and electronic communications) (3) should apply not only 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 adopting certain measures at national level.

(21) Transport services, including urban transport, taxis and ambulances as well as port services, should be excluded from the scope of this Directive.

(22) The exclusion of healthcare from the scope of this Direc- tive should cover healthcare and pharmaceutical services provided 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 the Member State in which the services are provided.

(23) This Directive does not affect the reimbursement of healthcare provided in a Member State other than that in which the recipient of the care is resident. This issue has been addressed by the Court of Justice on numerous occa- sions, and the Court has recognised patients’ rights. It is important to address this issue in another Community legal instrument in order to achieve greater legal certainty and clarity to the extent that this issue is not already addressed in Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (4).

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

(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 Directive 2006/24/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).

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

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

(27) This Directive should not cover those social services in the areas of housing, childcare and support to families and persons in need which are provided by the State at national, regional or local level by providers m andated by the State or by charities recognised as such by the State with the objective of ensuring support for those who are permanently or temporarily in a particular state of need because of their insufficient family income or total or par- tial lack of independence and for those who risk being marginalised. 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 social cohesion and solidarity and should not be affected by this Directive.

(28) This Directive does not deal with the funding of, or the system of aids linked to, social services. Nor does it affect the criteria or conditions set by Member States to ensure that social services effectively carry out a function to the benefit 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 instruments already adopted in that field, it is necessary to exclude the field of taxation from the scope of this Directive.

(30) There is already a considerable body of Community law on service activities. This Directive builds on, and thus complements, the Community acquis. Conflicts between this Directive and other Community instruments have been identified and are addressed by this Directive, includ- ing by means of derogations. However, it is necessary to provide a rule for any residual and exceptional cases where there is a conflict between a provision of this Directive and a provision of another Community instrument. The existence 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.

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

(32) This Directive is consistent with Community legislation on consumer protection, such as Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market (the Unfair Commercial Practices Directive) (2) and Regulation (EC) No 2006/2004 of the European Parliament and of the Council of 27 October 2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws (the Regulation on consumer protection cooperation) (3).

(33) The services covered by this Directive concern a wide vari- ety of ever-changing activities, including business services such 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 legal or 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 of application of the Directive, household support services, such as help for the elderly. Those activities may involve services requiring the proximity of provider and recipient, services requiring travel by the recipient or the provider and services which may be provided at a distance, includ- ing via the Internet.

(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 Directive 2005/29/EC.

(34) According to the case-law of the Court of Justice, the assessment of whether certain activities, in particular activities which are publicly funded or provided by public entities, constitute a ‘service’ has to be carried out on a case by case basis in the light of all their characteristics, in particular the way they are provided, organised and financed in the Member State concerned. The Court of Justice has held that the essential characteristic of remu- neration lies in the fact that it constitutes consideration for the services in question and has recognised that the characteristic of remuneration is absent in the case of activities performed, for no consideration, by the State or on behalf of the State in the context of its duties in the social, cultural, educational and judicial fields, such as courses provided under the national education system, or the management of social security schemes which do not engage in economic activity. The payment of a fee by recipients, for example, a tuition or enrolment fee paid by students in order to make a certain contribution to the operating expenses of a system, does not in itself consti- tute remuneration because the service is still essentially financed by public funds. These activities are, therefore, not covered by the definition of service in Article 50 of the Treaty and do not therefore fall within the scope of this Directive.

(35) Non-profit making amateur sporting activities are of con- siderable social importance. They often pursue wholly social 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, in exercise either of the freedom of establishment or of the free movement of services. The concept of provider should thus 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 operator establishes itself in a Member State in order to develop its service activities there. On the other hand, the concept of a provider should not cover the case of branches in a Member 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 only companies constituted in accordance with the laws of a Member State and having their registered office, central administration or principal place of business within the Community. The concept of ‘recipient’ should also cover third country nationals who already benefit from rights conferred upon them by Community acts such as Regula- tion (EEC) No 1408/71, Council Directive 2003/109/EC of 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

(4) OJ L 16, 23.1.2004, p. 44.

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

(37) The place at which a provider is established should be determined in accordance with the case law of the Court of Justice according to which the concept of establishment involves the actual pursuit of an economic activity through a 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 building or installation through which it pursues its activity. It may also be fulfilled where a Member State grants authorisa- tions for a limited duration only in relation to particular services. An establishment does not need to take the form of a subsidiary, branch or agency, but may consist of an office managed by a provider’s own staff or by a person who is independent but authorised to act on a permanent basis for the undertaking, as would be the case with an agency. According to this definition, which requires the actual 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 several places of establishment, it is important to determine the place of establishment from which the actual service con- cerned is provided. Where it is difficult to determine from which of several places of establishment a given service is provided, the location of the provider’s centre of activities relating to this particular service should be that place of establishment.

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

(39) The concept of ‘authorisation scheme’ should cover, inter alia, 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

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

be registered as a member of a profession or entered in a register, roll or database, to be officially appointed to a body or to obtain a card attesting to membership of a par- ticular profession. Authorisation may be granted not only by a formal decision but also by an implicit decision aris- ing, for example, from the silence of the competent authority or from the fact that the interested party must await acknowledgement of receipt of a declaration in order to commence the activity in question or for the latter to become lawful.

(40) The concept of ‘overriding reasons relating to the public interest’ to which reference is made in certain provisions of this Directive has been developed by the Court of Jus- tice in its case law in relation to Articles 43 and 49 of the Treaty and may continue to evolve. The notion as recog- nised in the case law of the Court of Justice covers at least the following grounds: public policy, public security and public health, within the meaning of Articles 46 and 55 of the Treaty; the maintenance of order in society; social policy 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 social security system; the prevention of fraud; the prevention of unfair competition; the protection of the environment and the urban environment, including town and country planning; the protection of creditors; safeguarding the sound 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 and philosophical values of society; the need to ensure a high level of education, the maintenance of press diversity and the promotion of the national language; the preservation of national historical and artistic heritage; and veterinary policy.

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

(42) The rules relating to administrative procedures should not aim at harmonising administrative procedures but at removing overly burdensome authorisation schemes, pro- cedures and formalities that hinder the freedom of estab- lishment and the creation of new service undertakings therefrom.

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(43) One of the fundamental difficulties faced, in particular by SMEs, in accessing service activities and exercising them is the complexity, length and legal uncertainty of admin- istrative procedures. For this reason, following the example of certain modernising and good administrative practice initiatives undertaken at Community and national level, it is 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 essential and the introduction of the principle of tacit authorisa- tion by the competent authorities after a certain period of time elapsed. Such modernising action, while maintaining the requirements on transparency and the updating of information relating to operators, is intended to eliminate the delays, costs and dissuasive effects which arise, for example, from unnecessary or excessively complex and burdensome 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 is given, the limited duration of validity of authorisations granted and disproportionate fees and penalties. Such practices have particularly significant dissuasive effects on providers wishing to develop their activities in other Mem- ber States and require coordinated modernisation within an enlarged internal market of twenty-five Member States.

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

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

(46) In order to facilitate access to service activities and the exercise thereof in the internal market, it is necessary to establish an objective, common to all Member States, of administrative simplification and to lay down provisions concerning, inter alia, the right to information, procedures by electronic means and the establishment of a framework for authorisation schemes. Other measures adopted at national 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 such procedures and formalities to those which are essential in order to achieve a general interest objective and which do not 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 an overriding reason relating to the public interest, such as the protection of workers, public health, the protection of the environment or the protection of consumers. It is also necessary to ensure that an authorisation as a general rule permits access to, or exercise of, a service activity through- out the national territory, unless a new authorisation for each establishment, for example for each new hypermar- ket, or an authorisation that is restricted to a specific part of the national territory is objectively justified by an over- riding reason relating to the public interest.

(48) In order to further simplify administrative procedures, it is appropriate to ensure that each provider has a single point through which he can complete all procedures and formalities (hereinafter referred to as ‘points of single con- tact’). The number of points of single contact per Member State may vary according to regional or local competen- cies or according to the activities concerned. The creation of points of single contact should not interfere with the allocation of functions among competent authorities within each national system. Where several authorities at regional or local level are competent, one of them may assume the role of point of single contact and coordina- tor. Points of single contact may be set up not only by administrative authorities but also by chambers of com- merce or crafts, or by the professional organisations or private bodies to which a Member State decides to entrust that function. Points of single contact have an important role to play in providing assistance to providers either as the authority directly competent to issue the documents necessary to access a service activity or as an intermedi- ary between the provider and the authorities which are directly competent.

(49) The fee which may be charged by points of single contact should be proportionate to the cost of the procedures and formalities with which they deal. This should not prevent Member States from entrusting the points of single con- tact with the collection of other administrative fees, such as the fee of supervisory bodies.

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

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(51) The information provided to providers and recipients of services should include, in particular, information on pro- cedures and formalities, contact details of the competent authorities, conditions for access to public registers and data bases and information concerning available remedies and the contact details of associations and organisations from which providers or recipients can obtain practical assistance. The obligation on competent authorities to assist 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 are usually interpreted or applied should be given. Issues such as liability for providing incorrect or misleading informa- tion should be determined by Member States.

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

(53) The granting of licences for certain service activities may require an interview with the applicant by the competent authority 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 by electronic means may not be appropriate.

(54) The possibility of gaining access to a service activity should be made subject to authorisation by the competent authorities 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 not be effective because of the impossibility of ascertaining the defects of the services concerned a posteriori, due account being taken of the risks and dangers which could arise in

the absence of a prior inspection. However, the provision to that effect made by this Directive cannot be relied upon in order to justify authorisation schemes which are pro- hibited by other Community instruments such as Directive 1999/93/EC of the European Parliament and the Council of 13 December 1999 on a Community frame- work for electronic signatures (1), or Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information soci- ety services, in particular electronic commerce, in the internal market (Directive on electronic commerce) (2). The results of the process of mutual evaluation will make it possible to determine, at Community level, the types of activity for which authorisation schemes should be eliminated.

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

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

(57) The provisions of this Directive relating to authorisation schemes should concern cases where the access to or exer- cise of a service activity by operators requires a decision by a competent authority. This concerns neither decisions by competent authorities to set up a public or private entity 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 rules on public procurement, since this Directive does not deal with 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 reporting obligation concerns only the existence of authorisation schemes 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.

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(59) The authorisation should as a general rule enable the pro- vider to have access to the service activity, or to exercise that activity, throughout the national territory, unless a territorial 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 individual authorisation for each installation on the national terri- tory. This provision should not affect regional or local competences for the granting of authorisations within the Member States.

(60) This Directive, and in particular the provisions concern- ing authorisation schemes and the territorial scope of an authorisation, should not interfere with the division of regional or local competences within the Member States, including regional and local self-government and the use of 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 conditions as specified in the authorisation scheme. It should only require that competent authorities, when considering whether these conditions are met by the applicant, take into account the equivalent conditions which have already been satisfied by the applicant in another Member State. This provision should not require the application of the conditions for the granting of an authorisation provided for 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 or technical capacity, a procedure for selection from among several potential candidates should be adopted with the aim of developing through open competition the quality and conditions for supply of services available to users. Such a procedure should provide guarantees of transpar- ency and impartiality and the authorisation thus granted should not have an excessive duration, be subject to auto- matic renewal or confer any advantage on the provider whose authorisation has just expired. In particular, the duration of the authorisation granted should be fixed in such 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 fair return on the capital invested. This provision should not prevent Member States from limiting the number of authorisations for reasons other than scarcity of natural resources or technical capacity. These authorisationss- hould remain in any case subject to the other provisions of this Directive relating to authorisation schemes.

(63) In the absence of different arrangements, failing a response within a time period, an authorisation should be deemed to have been granted. However, different arrangements may be put in place in respect of certain activities, where

objectively justified by overriding reasons relating to the public interest, including a legitimate interest of third par- ties. Such different arrangements could include national rules according to which, in the absence of a response of the competent authority, the application is deemed to have been rejected, this rejection being open to challenge before the 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 services which are still enshrined in the laws of certain Member States and which are incompatible with Articles 43 and 49 of the Treaty respectively. The restrictions to be prohib- ited particularly affect the internal market for services and should be systematically dismantled as soon as possible.

(65) Freedom of establishment is predicated, in particular, upon the principle of equal treatment, which entails the prohi- bition not only of any discrimination on grounds of nationality but also of any indirect discrimination based on other grounds but capable of producing the same result. Thus, access to a service activity or the exercise thereof in a Member State, either as a principal or second- ary activity, should not be made subject to criteria such as place of establishment, residence, domicile or principal provision of the service activity. However, these criteria should not include requirements according to which a provider or one of his employees or a representative must be present during the exercise of the activity when this is justified by an overriding reason relating to the public interest. Furthermore, a Member State should not restrict the legal capacity or the right of companies, incorporated in accordance with the law of another Member State on whose territory they have their primary establishment, to bring legal proceedings. Moreover, a Member State should not be able to confer any advantages on providers having a particular national or local socio-economic link; nor should 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 of credit or accommodation in so far as those choices are useful 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 a prerequisite for the grant of authorisation should cover economic tests as such, but not requirements which are objectively justified by overriding reasons relating to the public interest, such as the protection of the urban envi- ronment, social policy or public health. The prohibition should not affect the exercise of the powers of the authori- ties responsible for applying competition law.

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(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 insurance must be obtained from a financial institution established in 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 a given period in a register held in the Member State concerned.

(69) In order to coordinate the modernisation of national rules and regulations in a manner consistent with the require- ments of the internal market, it is necessary to evaluate certain 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 the freedom of establishment. This evaluation process should be limited to the compatibility of these requirements with the criteria already established by the Court of Justice on the freedom of establishment. It should not concern the application of Community competition law. Where such requirements are discriminatory or not objectively justi- fied by an overriding reason relating to the public inter- est, or where they are disproportionate, they must be abolished or amended. The outcome of this assessment will be different according to the nature of the activity and the public interest concerned. In particular, such require- ments could be fully justified when they pursue social policy objectives.

(70) For the purposes of this Directive, and without prejudice to Article 16 of the Treaty, services may be considered to be services of general economic interest only if they are provided 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 one or more acts, the form of which is determined by the Member State concerned, and should specify the precise nature of the special task.

(71) The mutual evaluation process provided for in this Direc- tive should not affect the freedom of Member States to set in their legislation a high level of protection of the public interest, in particular in relation to social policy objectives. Furthermore, it is necessary that the mutual evaluation process take fully into account the specificity of services of general economic interest and of the particular tasks assigned to them. This may justify certain restrictions on the freedom of establishment, in particular where such restrictions pursue the protection of public health and social 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, the Court 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 with important tasks relating to social and territorial cohesion. The performance of these tasks should not be obstructed as a result of the evaluation process provided for in this Directive. Requirements which are necessary for the fulfil- ment of such tasks should not be affected by this process while, at the same time, unjustified restrictions on the free- dom of establishment should be addressed.

(73) The requirements to be examined include national rules which, on grounds other than those relating to profes- sional qualifications, reserve access to certain activities to particular 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 with individual ownership, to be a non-profit making organi- sation or a company owned exclusively by natural per- sons, and requirements which relate to the shareholding of a company, in particular obligations to hold a mini- mum amount of capital for certain service activities or to have a specific qualification in order to hold share capital in or to manage certain companies. The evaluation of the compatibility of fixed minimum and/or maximum tariffs with the freedom of establishment concerns only tariffs imposed by competent authorities specifically for the pro- vision of certain services and not, for example, general rules on price determination, such as for the renting of houses.

(74) The mutual evaluation process means that during the transposition period Member States will first have to con- duct a screening of their legislation in order to ascertain whether any of the above mentioned requirements exists in their legal systems. At the latest by the end of the trans- position period, Member States should draw up a report on 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 by one year after the date of transposition of this Directive, the Commission should draw up a summary report, accompanied where appropriate by proposals for further initiatives. If necessary the Commission, in cooperation with the Member States, could assist them to design a common method.

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

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

(77) Where an operator travels to another Member State to exercise a service activity there, a distinction should be made between situations covered by the freedom of estab- lishment and those covered, due to the temporary nature of the activities concerned, by the free movement of ser- vices. As regards the distinction between the freedom of establishment and the free movement of services, accord- ing to the case law of the Court of Justice the key element is whether or not the operator is established in the Mem- ber State where it provides the service concerned. If the operator 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, the operator is not established in the Member State where the service is provided, its activities should be covered by the free movement of services. The Court of Justice has con- sistently held that the temporary nature of the activities in question should be determined in the light not only of the duration of the provision of the service, but also of its regularity, periodical nature or continuity. The fact that the 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 far as such infrastructure is necessary for the purposes of pro- viding the service in question.

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

(80) It is necessary to ensure that providers are able to take equipment which is integral to the provision of their ser- vice with them when they travel to provide services in another Member State. In particular, it is important to avoid cases in which the service could not be provided without the equipment or situations in which providers incur additional costs, for example, by hiring or purchas- ing different equipment to that which they habitually use or by needing to deviate significantly from the way they habitually carry out their activity.

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

(82) The provisions of this Directive should not preclude the application by a Member State of rules on employment conditions. 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 with other 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 the areas 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 Community instruments relating to services pursuant to which a pro- vider is subject to the application of a law other than that of the Member State of establishment. Moreover, by way of exception, measures against a given provider should also 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 services should be permitted, by way of exception, only if it is con- sistent with fundamental rights which form an integral part of the general principles of law enshrined in the Com- munity legal order.

(79) The Court of Justice has consistently held that Member States retain the right to take measures in order to pre- (84) The derogation from the provision on the freedom to pro- vent providers from abusively taking advantage of the vide services concerning postal services should cover both internal market principles. Abuse by a provider should be activities reserved to the universal service provider and established on a case by case basis. other postal services.

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

(86) This Directive should not affect terms and conditions of employment which, pursuant to Directive 96/71/ECof the European 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 workers posted to provide a service in the territory of another Member 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 areas applicable in the Member State where the service is pro- vided. These are: maximum work periods and minimum rest periods, minimum paid annual holidays, minimum rates of pay, including overtime rates, the conditions of hiring out of workers, in particular the protection of work- ers hired out by temporary employment undertakings, health, safety and hygiene at work, protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth and of children and young people and equality of treatment between men and women and other provisions on non-discrimination. This not only concerns terms and conditions of employment which are laid down by law but also those laid down in collective agreements or arbitration awards that are officially declared or de facto universally applicable within the meaning of Directive 96/71/EC. Moreover, this Directive should not prevent Member States from applying terms and conditions of employment on matters other than those listed in Article 3(1) of Directive 96/71/EC on the grounds of pub- lic policy.

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

(1) OJ L 18, 21.1.1997, p. 1.

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

(88) The provision on the freedom to provide services should not apply in cases where, in conformity with Community law, an activity is reserved in a Member State to a particu- lar profession, for example requirements which reserve the provision 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 that in which they are used follows from the case law of the Court of Justice, which has recognised that a Member State may impose such an obligation, in accordance with pro- portionate conditions, in the case of vehicles used on its territory. That exclusion does not cover occasional or tem- porary rental.

(90) Contractual relations between the provider and the client as well as between an employer and employee should not be subject to this Directive. The applicable law regarding the 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 freedom to provide services in respect of a provider established in another 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 Community level.

(92) Restrictions on the free movement of services, contrary to this Directive, may arise not only from measures applied to providers, but also from the many barriers to the use of services by recipients, especially consumers. This Direc- tive mentions, by way of illustration, certain types of restriction applied to a recipient wishing to use a service performed by a provider established in another Member State. This also includes cases where recipients of a ser- vice are under an obligation to obtain authorisation from or to make a declaration to their competent authorities in order to receive a service from a provider established in another Member State. This does not concern general authorisation schemes which also apply to the use of a service supplied by a provider established in the same Member State.

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(93) The concept of financial assistance provided for the use of a particular service should not apply to systems of aids granted by Member States, in particular in the social field or 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, for example grants or loans to students.

(94) In accordance with the Treaty rules on the free movement of services, discrimination on grounds of the nationality of 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 Member State, to supply original documents, certified copies, a cer- tificate of nationality or official translations of documents in order to benefit from a service or from more advanta- geous terms or prices. However, the prohibition of dis- criminatory requirements should not preclude the reservation 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 internal market means that access by a recipient, and especially by a consumer, to a service on offer to the public may not be 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 unlawful discrimination if provision were made in such general con- ditions for different tariffs and conditions to apply to the provision of a service, where those tariffs, prices and con- ditions are justified for objective reasons that can vary from country to country, such as additional costs incurred because 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 influenced by seasonality, different vacation periods in the Member States and pricing by different competitors, or extra risks linked to rules differing from those of the Member State of establishment. Neither does it follow that the non- provision of a service to a consumer for lack of the required intellectual property rights in a particular terri- tory would constitute unlawful discrimination.

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

advertising, but rather documents giving a detailed description of the services proposed, including documents on a website.

(97) It is necessary to provide in this Directive for certain rules on high quality of services, ensuring in particular informa- tion and transparency requirements. These rules should apply both in cases of cross border provision of services between Member States and in cases of services provided in a Member State by a provider established there, with- out imposing unnecessary burdens on SMEs. They should not in any way prevent Member States from applying, in conformity with this Directive and other Community law, additional or different quality requirements.

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

(99) The insurance or guarantee should be appropriate to the nature and extent of the risk. Therefore it should be nec- essary for the provider to have cross-border cover only if that provider actually provides services in other Member States. Member States should not lay down more detailed rules concerning the insurance cover and fix for example minimum thresholds for the insured sum or limits on exclusions from the insurance cover. Providers and insur- ance companies should maintain the necessary flexibility to negotiate insurance policies precisely targeted to the nature and extent of the risk. Furthermore, it is not neces- sary for an obligation of appropriate insurance to be laid down 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 for insurance companies to provide insurance cover.

(100) It is necessary to put an end to total prohibitions on com- mercial communications by the regulated professions, not by removing bans on the content of a commercial com- munication but rather by removing those bans which, in a general way and for a given profession, forbid one or more forms of commercial communication, such as a ban on all advertising in one or more given media. As regards the content and methods of commercial communication, it is necessary to encourage professionals to draw up, in accordance with Community law, codes of conduct at Community level.

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(101) It is necessary and in the interest of recipients, in particu- lar consumers, to ensure that it is possible for providers to offer multidisciplinary services and that restrictions in this regard be limited to what is necessary to ensure the impartiality, independence and integrity of the regulated professions. This does not affect restrictions or prohibi- tions on carrying out particular activities which aim at ensuring independence in cases in which a Member State entrusts a provider with a particular task, notably in the area 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 the quality 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 transparency is particularly important in areas such as tourism, espe- cially the hotel business, in which the use of a system of classification is widespread. Moreover, it is appropriate to examine the extent to which European standardisation could facilitate compatibility and quality of services. European standards are drawn up by the European standards-setting bodies, the European Committee for Standardisation (CEN), the European Committee for Elec- trotechnical Standardisation (CENELEC) and the European Telecommunications Standards Institute (ETSI). Where appropriate, the Commission may, in accordance with the procedures 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 in the field of technical standards and regulations (1) and of rules on Information Society services, issue a mandate for the drawing up of specific European standards.

(103) In order to solve potential problems with compliance with judicial decisions, it is appropriate to provide that Mem- ber States recognise equivalent guarantees lodged with institutions or bodies such as banks, insurance providers or other financial services providers established in another Member 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 cooperation provided 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 obstacles to cooperation in this field, necessitates a greater degree of cooperation between Member States. In particular, it is

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

necessary in this area to ensure that Member States require the 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 of rules applicable to providers or duplication of controls for cross-border activities, and can also be used by rogue trad- ers to avoid supervision or to circumvent applicable national rules on services. It is, therefore, essential to pro- vide for clear, legally binding obligations for Member States 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, enforcement and imposition of sanctions and subsequent follow-up activities.

(107) In normal circumstances mutual assistance should take place directly between competent authorities. The liaison points designated by Member States should be required to facilitate this process only in the event of difficulties being encountered, for instance if assistance is required to iden- tify the relevant competent authority.

(108) Certain obligations of mutual assistance should apply to all 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 should apply only in cases of cross-border provision of services, where the provision on the freedom to provide services applies. A further set of obligations should apply in all cases of cross-border provision of services, including areas not covered by the provision on the freedom to provide services. Cross-border provision of services should include cases where services are provided at a distance and where the recipient travels to the Member State of establishment of 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, it is necessary to provide for mutual assistance between those two Member States so that the former can carry out checks, inspections and enquiries at the request of the Member State of establishment or carry out such checks on 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 the provision on the freedom to provide services, by conduct- ing checks, inspections or investigations which are dis- criminatory or disproportionate.

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(111) The provisions of this Directive concerning exchange of information regarding the good repute of providers should not pre-empt initiatives in the area of police and judicial cooperation in criminal matters, in particular on the exchange of information between law enforcement authorities of the Member States and on criminal records.

(112) Cooperation between Member States requires a well- functioning electronic information system in order to allow 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 interested parties to draw up codes of conduct at Community level, aimed, in particular, at promoting the quality of services and 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 be compatible with legally binding rules governing profes- sional ethics and conduct in the Member States.

(114) Member States should encourage the setting up of codes of conduct, in particular, by professional bodies, organi- sations and associations at Community level. These codes of conduct should include, as appropriate to the specific nature of each profession, rules for commercial commu- nications relating to the regulated professions and rules of professional 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 subject should be included in such codes of conduct. Member States should take accompanying measures to encourage professional bodies, organisations and associations to implement at national level the codes of conduct adopted at Community level.

(115) Codes of conduct at Community level are intended to set minimum standards of conduct and are complementary to Member States’ legal requirements. They do not pre- clude Member States, in accordance with Community law, from taking more stringent measures in law or national professional bodies from providing for greater protection in 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 of services between Member States, cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale of the action, be better achieved at Community level, the Community may adopt measures,

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

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

(118) In accordance with paragraph 34 of the Interinstitutional Agreement on better law-making (2), Member States are encouraged to draw up, for themselves and in the interest of the Community, their own tables, which will, as far as possible, illustrate the correlation between the Directive and 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 the exercise of the freedom of establishment for service providers and the free movement of services, while maintaining a high quality of services.

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

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

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

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

(1) OJ L 184, 17.7.1999, p. 23. Decision as amended by Decision 2006/512/EC (OJ L 200, 22.7.2006, p. 11).

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

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

6. This Directive does not affect labour law, that is any legal or contractual provision concerning employment conditions, working conditions, including health and safety at work and the relationship between employers and workers, which Member States apply in accordance with national law which respects Community law. Equally, this Directive does not affect the social security legislation of the Member States.

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

Article 2

Scope

1. This Directive shall apply to services supplied by providers established 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 and re-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, and associated 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 via healthcare facilities, and regardless of the ways in which they are organised and financed at national level or whether they are 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 with pecuniary value in games of chance, including lotteries, gam- bling in casinos and betting transactions;

(i) activities which are connected with the exercise of official authority 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 in need which are provided by the State, by providers man- dated by the State or by charities recognised as such by the State;

(k) private security services;

(l) services provided by notaries and bailiffs, who are appointed by 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 provision of another Community act governing specific aspects of access to or exercise of a service activity in specific sectors or for spe- cific professions, the provision of the other Community act shall prevail 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 the coordination of certain provisions laid down by law, regula- tion or administrative action in Member States concerning the 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 which guarantee that consumers benefit from the protection granted to them 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 Directive 97/36/EC of the European Parliament and of the Council (OJ L 202, 30.7.1997, p. 60).

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3. Member States shall apply the provisions of this Directive in 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 shall apply:

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

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

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

4) ‘Member State of establishment’ means the Member State in whose territory the provider of the service concerned is established;

5) ‘establishment’ means the actual pursuit of an economic activity, 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 actually carried out;

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

7) ‘requirement’ means any obligation, prohibition, condition or limit provided for in the laws, regulations or administra- tive provisions of the Member States or in consequence of case-law, administrative practice, the rules of professional bodies, or the collective rules of professional associations or other professional organisations, adopted in the exercise of their legal autonomy; rules laid down in collective agree- ments negotiated by the social partners shall not as such be seen 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; public security; public safety; public health; preserving the finan- cial equilibrium of the social security system; the protection

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

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

10) ‘Member State where the service is provided’ means the Member State where the service is supplied by a provider established in another Member State;

11) ‘regulated profession’ means a professional activity or a group of professional activities as referred to in Article 3(1)(a) of Directive 2005/36/EC;

12) ‘commercial communication’ means any form of communi- cation designed to promote, directly or indirectly, the goods, services or image of an undertaking, organisation or person engaged in commercial, industrial or craft activity or prac- tising a regulated profession. The following do not in them- selves constitute commercial communications:

(a) information enabling direct access to the activity of the undertaking, organisation or person, including in par- ticular a domain name or an electronic-mailing address;

(b) communications relating to the goods, services or image of the undertaking, organisation or person, compiled in an independent manner, particularly when provided for no financial consideration.

CHAPTER II

ADMINISTRATIVE SIMPLIFICATION

Article 5

Simplification of procedures

1. Member States shall examine the procedures and formali- ties applicable to access to a service activity and to the exercise thereof. Where procedures and formalities examined under this paragraph are not sufficiently simple, Member States shall sim- plify them.

2. The Commission may introduce harmonised forms at Com- munity level, in accordance with the procedure referred to in Article 40(2). These forms shall be equivalent to certificates, attes- tations and any other documents required of a provider.

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3. Where Member States require a provider or recipient to supply a certificate, attestation or any other document proving that a requirement has been satisfied, they shall accept any docu- ment from another Member State which serves an equivalent pur- pose or from which it is clear that the requirement in question has been satisfied. They may not require a document from another Member State to be produced in its original form, or as a certified copy or as a certified translation, save in the cases pro- vided for in other Community instruments or where such a requirement is justified by an overriding reason relating to the public interest, including public order and security.

The first subparagraph shall not affect the right of Member States to require non-certified translations of documents in one of their official languages.

4. Paragraph 3 shall not apply to the documents referred to in Article 7(2) and 50 of Directive 2005/36/EC, in Articles 45(3), 46, 49 and 50 of Directive 2004/18/EC of the European Parlia- ment and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (1), in Article 3(2) of Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 to facilitate practice of the profes- sion of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained (2), in the First Council Directive 68/151/EEC of 9 March 1968 on coordina- tion of safeguards which, for the protection of the interests of members and others, are required by Member States of compa- nies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community (3) and in the Eleventh Council Directive 89/666/EECof 21 December 1989 concerning disclo- sure requirements in respect of branches opened in a Member State by certain types of company governed by the law of another State (4).

Article 6

Points of single contact

1. Member States shall ensure that it is possible for providers to complete the following procedures and formalities through points of single contact:

(a) all procedures and formalities needed for access to his service activities, in particular, all declarations, notifications or appli- cations necessary for authorisation from the competent authorities, including applications for inclusion in a regis- ter, a roll or a database, or for registration with a profes- sional body or association;

(1) OJ L 134, 30.4.2004, p. 114. Directive as last amended by Commis- sion Regulation (EC) No 2083/2005 (OJ L 333, 20.12.2005, p. 28).

(2) OJ L 77, 14.3.1998, p. 36. Directive as amended by the 2003 Act of Accession.

(3) OJ L 65, 14.3.1968, p. 8. Directive as last amended by Directive 2003/58/EC of the European Parliament and of the Council (OJ L 221, 4.9.2003, p. 13).

(4) OJ L 395, 30.12.1989, p. 36.

(b) any applications for authorisation needed to exercise his ser- vice activities.

2. The establishment of points of single contact shall be with- out prejudice to the allocation of functions and powers among the authorities within national systems.

Article 7

Right to information

1. Member States shall ensure that the following information is easily accessible to providers and recipients through the points of single contact:

(a) requirements applicable to providers established in their ter- ritory, in particular those requirements concerning the pro- cedures and formalities to be completed in order to access and to exercise service activities;

(b) the contact details of the competent authorities enabling the latter to be contacted directly, including the details of those authorities responsible for matters concerning the exercise of service activities;

(c) the means of, and conditions for, accessing public registers and databases on providers and services;

(d) the means of redress which are generally available in the event of dispute between the competent authorities and the provider or the recipient, or between a provider and a recipi- ent or between providers;

(e) the contact details of the associations or organisations, other than the competent authorities, from which providers or recipients may obtain practical assistance.

2. Member States shall ensure that it is possible for providers and recipients to receive, at their request, assistance from the competent authorities, consisting in information on the way in which the requirements referred to in point (a) of para- graph 1 are generally interpreted and applied. Where appropri- ate, such advice shall include a simple step-by-step guide. The information shall be provided in plain and intelligible language.

3. Member States shall ensure that the information and assis- tance referred to in paragraphs 1 and 2 are provided in a clear and unambiguous manner, that they are easily accessible at a dis- tance and by electronic means and that they are kept up to date.

4. Member States shall ensure that the points of single con- tact and the competent authorities respond as quickly as pos- sible to any request for information or assistance as referred to in paragraphs 1 and 2 and, in cases where the request is faulty or unfounded, inform the applicant accordingly without delay.

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5. Member States and the Commission shall take accompany- ing measures in order to encourage points of single contact to make the information provided for in this Article available in other Community languages. This does not interfere with Mem- ber States’ legislation on the use of languages.

6. The obligation for competent authorities to assist provid- ers and recipients does not require those authorities to provide legal advice in individual cases but concerns only general infor- mation on the way in which requirements are usually interpreted or applied.

Article 8

Procedures by electronic means

1. Member States shall ensure that all procedures and formali- ties relating to access to a service activity and to the exercise thereof may be easily completed, at a distance and by electronic means, through the relevant point of single contact and with the relevant competent authorities.

2. Paragraph 1 shall not apply to the inspection of premises on which the service is provided or of equipment used by the provider or to physical examination of the capability or of the personal integrity of the provider or of his responsible staff.

3. The Commission shall, in accordance with the procedure referred to in Article 40(2), adopt detailed rules for the imple- mentation of paragraph 1 of this Article with a view to facilitat- ing the interoperability of information systems and use of procedures by electronic means between Member States, taking into account common standards developed at Community level.

CHAPTER III

FREEDOM OF ESTABLISHMENT FOR PROVIDERS

SECTION 1

Authorisations

Article 9

Authorisation schemes

1. Member States shall not make access to a service activity or the exercise thereof subject to an authorisation scheme unless the following conditions are satisfied:

(a) the authorisation scheme does not discriminate against the provider in question;

(b) the need for an authorisation scheme is justified by an over- riding reason relating to the public interest;

(c) the objective pursued cannot be attained by means of a less restrictive measure, in particular because an a posteriori inspection would take place too late to be genuinely effective.

2. In the report referred to in Article 39(1), Member States shall identify their authorisation schemes and give reasons show- ing their compatibility with paragraph 1 of this Article.

3. This section shall not apply to those aspects of authorisa- tion schemes which are governed directly or indirectly by other Community instruments.

Article 10

Condiations for the granting of authorisation

1. Authorisation schemes shall be based on criteria which pre- clude the competent authorities from exercising their power of assessment in an arbitrary manner.

2. The criteria referred to in paragraph 1 shall be:

(a) non-discriminatory;

(b) justified by an overriding reason relating to the public interest;

(c) proportionate to that public interest objective;

(d) clear and unambiguous;

(e) objective;

(f) made public in advance;

(g) transparent and accessible.

3. The conditions for granting authorisation for a new estab- lishment shall not duplicate requirements and controls which are equivalent or essentially comparable as regards their purpose to which the provider is already subject in another Member State or in the same Member State. The liaison points referred to in Article 28(2) and the provider shall assist the competent author- ity by providing any necessary information regarding those requirements.

4. The authorisation shall enable the provider to have access to the service activity, or to exercise that activity, throughout the national territory, including by means of setting up agencies, sub- sidiaries, branches or offices, except where an authorisation for each individual establishment or a limitation of the authorisa- tion to a certain part of the territory is justified by an overriding reason relating to the public interest.

5. The authorisation shall be granted as soon as it is estab- lished, in the light of an appropriate examination, that the con- ditions for authorisation have been met.

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6. Except in the case of the granting of an authorisation, any decision from the competent authorities, including refusal or withdrawal of an authorisation, shall be fully reasoned and shall be open to challenge before the courts or other instances of appeal.

7. This Article shall not call into question the allocation of the competences, at local or regional level, of the Member States’ authorities granting authorisations.

Article 11

Duration of authorisation

1. An authorisation granted to a provider shall not be for a limited period, except where:

(a) the authorisation is being automatically renewed or is sub- ject only to the continued fulfilment of requirements;

(b) the number of available authorisations is limited by an over- riding reason relating to the public interest;

or

(c) a limited authorisation period can be justified by an overrid- ing reason relating to the public interest.

2. Paragraph 1 shall not concern the maximum period before the end of which the provider must actually commence his activ- ity after receiving authorisation.

3. Member States shall require a provider to inform the rel- evant point of single contact provided for in Article 6 of the fol- lowing changes:

(a) the creation of subsidiaries whose activities fall within the scope of the authorisation scheme;

(b) changes in his situation which result in the conditions for authorisation no longer being met.

4. This Article shall be without prejudice to the Member States’ ability to revoke authorisations, when the conditions for authorisation are no longer met.

Article 12

Selection from among several candidates

1. Where the number of authorisations available for a given activity is limited because of the scarcity of available natural resources or technical capacity, Member States shall apply a selec- tion procedure to potential candidates which provides full guar- antees of impartiality and transparency, including, in particular, adequate publicity about the launch, conduct and completion of the procedure.

2. In the cases referred to in paragraph 1, authorisation shall be granted for an appropriate limited period and may not be open to automatic renewal nor confer any other advantage on the provider whose authorisation has just expired or on any per- son having any particular links with that provider.

3. Subject to paragraph 1 and to Articles 9 and 10, Member States may take into account, in establishing the rules for the selection procedure, considerations of public health, social policy objectives, the health and safety of employees or self-employed persons, the protection of the environment, the preservation of cultural heritage and other overriding reasons relating to the pub- lic interest, in conformity with Community law.

Article 13

Authorisation procedures

1. Authorisation procedures and formalities shall be clear, made public in advance and be such as to provide the applicants with a guarantee that their application will be dealt with objec- tively and impartially.

2. Authorisation procedures and formalities shall not be dis- suasive and shall not unduly complicate or delay the provision of the service. They shall be easily accessible and any charges which the applicants may incur from their application shall be reasonable and proportionate to the cost of the authorisation procedures in question and shall not exceed the cost of the procedures.

3. Authorisation procedures and formalities shall provide applicants with a guarantee that their application will be pro- cessed as quickly as possible and, in any event, within a reason- able period which is fixed and made public in advance. The period shall run only from the time when all documentation has been submitted. When justified by the complexity of the issue, the time period may be extended once, by the competent author- ity, for a limited time. The extension and its duration shall be duly motivated and shall be notified to the applicant before the original period has expired.

4. Failing a response within the time period set or extended in accordance with paragraph 3, authorisation shall be deemed to have been granted. Different arrangements may nevertheless be put in place, where justified by overriding reasons relating to the public interest, including a legitimate interest of third parties.

5. All applications for authorisation shall be acknowledged as quickly as possible. The acknowledgement must specify the following:

(a) the period referred to in paragraph 3;

(b) the available means of redress;

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(c) where applicable, a statement that in the absence of a response within the period specified, the authorisation shall be deemed to have been granted.

6. In the case of an incomplete application, the applicant shall be informed as quickly as possible of the need to supply any additional documentation, as well as of any possible effects on the period referred to in paragraph 3.

7. When a request is rejected because it fails to comply with the required procedures or formalities, the applicant shall be informed of the rejection as quickly as possible.

SECTION 2

Requirements prohibited or subject to evaluation

Article 14

Prohibited requirements

Member States shall not make access to, or the exercise of, a ser- vice activity in their territory subject to compliance with any of the following:

1) discriminatory requirements based directly or indirectly on nationality or, in the case of companies, the location of the registered office, including in particular:

(a) nationality requirements for the provider, his staff, per- sons holding the share capital or members of the pro- vider’s management or supervisory bodies;

(b) a requirement that the provider, his staff, persons hold- ing the share capital or members of the provider’s man- agement or supervisory bodies be resident within the territory;

2) a prohibition on having an establishment in more than one Member State or on being entered in the registers or enrolled with professional bodies or associations of more than one Member State;

3) restrictions on the freedom of a provider to choose between a principal or a secondary establishment, in particular an obligation on the provider to have its principal establish- ment in their territory, or restrictions on the freedom to choose between establishment in the form of an agency, branch or subsidiary;

4) conditions of reciprocity with the Member State in which the provider already has an establishment, save in the case of conditions of reciprocity provided for in Community instruments concerning energy;

5) the case-by-case application of an economic test making the granting of authorisation subject to proof of the existence of an economic need or market demand, an assessment of the potential or current economic effects of the activity or an assessment of the appropriateness of the activity in rela- tion to the economic planning objectives set by the compe- tent authority; this prohibition shall not concern planning requirements which do not pursue economic aims but serve overriding reasons relating to the public interest;

6) the direct or indirect involvement of competing operators, including within consultative bodies, in the granting of authorisations or in the adoption of other decisions of the competent authorities, with the exception of professional bodies and associations or other organisations acting as the competent authority; this prohibition shall not concern the consultation of organisations, such as chambers of com- merce or social partners, on matters other than individual applications for authorisation, or a consultation of the pub- lic at large;

7) an obligation to provide or participate in a financial guaran- tee or to take out insurance from a provider or body estab- lished in their territory. This shall not affect the possibility for Member States to require insurance or financial guaran- tees as such, nor shall it affect requirements relating to the participation in a collective compensation fund, for instance for members of professional bodies or organisations;

8) an obligation to have been pre-registered, for a given period, in the registers held in their territory or to have previously exercised the activity for a given period in their territory.

Article 15

Requirements to be evaluated

1. Member States shall examine whether, under their legal sys- tem, any of the requirements listed in paragraph 2 are imposed and shall ensure that any such requirements are compatible with the conditions laid down in paragraph 3. Member States shall adapt their laws, regulations or administrative provisions so as to make them compatible with those conditions.

2. Member States shall examine whether their legal system makes access to a service activity or the exercise of it subject to compliance with any of the following non-discriminatory requirements:

(a) quantitative or territorial restrictions, in particular in the form of limits fixed according to population or of a mini- mum geographical distance between providers;

(b) an obligation on a provider to take a specific legal form;

(c) requirements which relate to the shareholding of a company;

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(d) requirements, other than those concerning matters covered by Directive 2005/36/EC or provided for in other Commu- nity instruments, which reserve access to the service activity in question to particular providers by virtue of the specific nature of the activity;

(e) a ban on having more than one establishment in the terri- tory of the same State;

(f) requirements fixing a minimum number of employees;

(g) fixed minimum and/or maximum tariffs with which the pro- vider must comply;

(h) an obligation on the provider to supply other specific ser- vices jointly with his service.

3. Member States shall verify that the requirements referred to in paragraph 2 satisfy the following conditions:

(a) non-discrimination: requirements must be neither directly nor indirectly discriminatory according to nationality nor, with regard to companies, according to the location of the registered office;

(b) necessity: requirements must be justified by an overriding reason relating to the public interest;

(c) proportionality: requirements must be suitable for securing the attainment of the objective pursued; they must not go beyond what is necessary to attain that objective and it must not be possible to replace those requirements with other, less restrictive measures which attain the same result.

4. Paragraphs 1, 2 and 3 shall apply to legislation in the field of services of general economic interest only insofar as the appli- cation of these paragraphs does not obstruct the performance, in law or in fact, of the particular task assigned to them.

5. In the mutual evaluation report provided for in Article 39(1), Member States shall specify the following:

(a) the requirements that they intend to maintain and the rea- sons why they consider that those requirements comply with the conditions set out in paragraph 3;

(b) the requirements which have been abolished or made less stringent.

6. From 28 December 2006 Member States shall not intro- duce any new requirement of a kind listed in paragraph 2, unless that requirement satisfies the conditions laid down in paragraph 3.

7. Member States shall notify the Commission of any new laws, regulations or administrative provisions which set require- ments as referred to in paragraph 6, together with the reasons for those requirements. The Commission shall communicate the provisions concerned to the other Member States. Such notifica- tion shall not prevent Member States from adopting the provi- sions in question.

Within a period of 3 months from the date of receipt of the noti- fication, the Commission shall examine the compatibility of any new requirements with Community law and, where appropriate, shall adopt a decision requesting the Member State in question to refrain from adopting them or to abolish them.

The notification of a draft national law in accordance with Direc- tive 98/34/EC shall fulfil the obligation of notification provided for in this Directive.

CHAPTER IV

FREE MOVEMENT OF SERVICES

SECTION 1

Freedom to provide services and related derogations

Article 16

Freedom to provide services

1. Member States shall respect the right of providers to pro- vide services in a Member State other than that in which they are established.

The Member State in which the service is provided shall ensure free access to and free exercise of a service activity within its territory.

Member States shall not make access to or exercise of a service activity in their territory subject to compliance with any require- ments which do not respect the following principles:

(a) non-discrimination: the requirement may be neither directly nor indirectly discriminatory with regard to nationality or, in the case of legal persons, with regard to the Member State in which they are established;

(b) necessity: the requirement must be justified for reasons of public policy, public security, public health or the protec- tion of the environment;

(c) proportionality: the requirement must be suitable for attain- ing the objective pursued, and must not go beyond what is necessary to attain that objective.

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2. Member States may not restrict the freedom to provide ser- vices in the case of a provider established in another Member State by imposing any of the following requirements:

(a) an obligation on the provider to have an establishment in their territory;

(b) an obligation on the provider to obtain an authorisation from their competent authorities including entry in a regis- ter or registration with a professional body or association in their territory, except where provided for in this Directive or other instruments of Community law;

(c) a ban on the provider setting up a certain form or type of infrastructure in their territory, including an office or cham- bers, which the provider needs in order to supply the ser- vices in question;

(d) the application of specific contractual arrangements between the provider and the recipient which prevent or restrict ser- vice provision by the self-employed;

(e) an obligation on the provider to possess an identity docu- ment issued by its competent authorities specific to the exer- cise of a service activity;

(f) requirements, except for those necessary for health and safety at work, which affect the use of equipment and mate- rial which are an integral part of the service provided;

(g) restrictions on the freedom to provide the services referred to in Article 19.

3. The Member State to which the provider moves shall not be prevented from imposing requirements with regard to the pro- vision of a service activity, where they are justified for reasons of public policy, public security, public health or the protection of the environment and in accordance with paragraph 1. Nor shall that Member State be prevented from applying, in accordance with Community law, its rules on employment conditions, including those laid down in collective agreements.

4. By 28 December 2011 the Commission shall, after consul- tation of the Member States and the social partners at Commu- nity level, submit to the European Parliament and the Council a report on the application of this Article, in which it shall con- sider the need to propose harmonisation measures regarding ser- vice activities covered by this Directive.

Article 17

Additional derogations from the freedom to provide services

Article 16 shall not apply to:

1) services of general economic interest which are provided in another Member State, inter alia:

(a) in the postal sector, services covered by Directive 97/67/EC of the European Parliament and of the Coun- cil of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service (1);

(b) in the electricity sector, services covered by Directive 2003/54/EC (2) of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity;

(c) in the gas sector, services covered by Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas (3);

(d) water distribution and supply services and waste water services;

(e) treatment of waste;

2) matters covered by Directive 96/71/EC;

3) matters covered by Directive 95/46/EC of the European Par- liament and of the Council of 24 October 1995 on the pro- tection of individuals with regard to the processing of personal data and on the free movement of such data (4);

4) matters covered by Council Directive 77/249/EEC of 22 March 1977to facilitate the effective exercise by lawyers of freedom to provide services (5);

5) the activity of judicial recovery of debts;

(1) OJ L 15, 21.1.1998, p. 14. Directive as last amended by Regulation (EC) No 1882/2003 (OJ L 284, 31.10.2003, p. 1).

(2) OJ L 176, 15.7.2003, p. 37. Directive as last amended by Commis- sion Decision 2006/653/EC (OJ L 270, 29.9.2006, p. 72).

(3) OJ L 176, 15.7.2003, p. 57. (4) OJ L 281, 23.11.1995, p. 31. Directive as amended by Regulation (EC) No 1882/2003.

(5) OJ L 78, 26.3.1977, p. 17. Directive as last amended by the 2003 Act of Accession.

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6) matters covered by Title II of Directive 2005/36/EC, as well as requirements in the Member State where the service is provided which reserve an activity to a particular profession;

7) matters covered by Regulation (EEC) No 1408/71;

8) as regards administrative formalities concerning the free movement of persons and their residence, matters covered by the provisions of Directive 2004/38/EC that lay down administrative formalities of the competent authorities of the Member Statewhere the service is provided with which beneficiaries must comply;

9) as regards third country nationals who move to another Member State in the context of the provision of a service, the possibility for Member States to require visa or residence permits for third country nationals who are not covered by the mutual recognition regime provided for in Article 21 of the Convention implementing the Schengen Agreement of 14 June 1985 on the gradual abolition of checks at the com- mon borders (1) or the possibility to oblige third country nationals to report to the competent authorities of the Mem- ber State in which the service is provided on or after their entry;

10) as regards the shipment of waste, matters covered by Coun- cil Regulation (EEC) No 259/93 of 1 February 1993 on the supervision and control of shipments of waste within, into and out of the European Community (2);

11) copyright, neighbouring rights and rights covered by Coun- cil Directive 87/54/EEC of 16 December 1986 on the legal protection of topographies of semiconductor products (3) and by Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases (4), as well as industrial property rights;

12) acts requiring by law the involvement of a notary;

13) matters covered by Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audit of annual accounts and consolidated accounts (5);

14) the registration of vehicles leased in another Member State;

(1) OJ L 239, 22.9.2000, p. 19. Convention as last amended by Regula- tion (EC) No 1160/2005 of the European Parliament and of the Coun- cil (OJ L 191, 22.7.2005, p. 18).

(2) OJ L 30, 6.2.1993, p. 1. Regulation as last amended by Commission Regulation (EC) No 2557/2001 (OJ L 349, 31.12.2001, p. 1).

(3) OJ L 24, 27.1.1987, p. 36. (4) OJ L 77, 27.3.1996, p. 20. (5) OJ L 157, 9.6.2006, p. 87.

15) provisions regarding contractual and non-contractual obli- gations, including the form of contracts, determined pursu- ant to the rules of private international law.

Article 18

Case-by-case derogations

1. By way of derogation from Article 16, and in exceptional circumstances only, a Member State may, in respect of a pro- vider established in another Member State, take measures relat- ing to the safety of services.

2. The measures provided for in paragraph 1 may be taken only if the mutual assistance procedure laid down in Article 35 is complied with and the following conditions are fulfilled:

(a) the national provisions in accordance with which the mea- sure is taken have not been subject to Community harmoni- sation in the field of the safety of services;

(b) the measures provide for a higher level of protection of the recipient than would be the case in a measure taken by the Member State of establishment in accordance with its national provisions;

(c) the Member State of establishment has not taken any mea- sures or has taken measures which are insufficient as com- pared with those referred to in Article 35(2);

(d) the measures are proportionate.

3. Paragraphs 1 and 2 shall be without prejudice to provi- sions, laid down in Community instruments, which guarantee the freedom to provide services or which allow derogations therefrom.

SECTION 2

Rights of recipients of services

Article 19

Prohibited restrictions

Member States may not impose on a recipient requirements which restrict the use of a service supplied by a provider estab- lished in another Member State, in particular the following requirements:

(a) an obligation to obtain authorisation from or to make a dec- laration to their competent authorities;

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(b) discriminatory limits on the grant of financial assistance by reason of the fact that the provider is established in another Member State or by reason of the location of the place at which the service is provided.

Article 20

Non-discrimination

1. Member States shall ensure that the recipient is not made subject to discriminatory requirements based on his nationality or place of residence.

2. Member States shall ensure that the general conditions of access to a service, which are made available to the public at large by the provider, do not contain discriminatory provisions relating to the nationality or place of residence of the recipient, but without precluding the possibility of providing for differ- ences in the conditions of access where those differences are directly justified by objective criteria.

Article 21

Assistance for recipients

1. Member States shall ensure that recipients can obtain, in their Member State of residence, the following information:

(a) general information on the requirements applicable in other Member States relating to access to, and exercise of, service activities, in particular those relating to consumer protection;

(b) general information on the means of redress available in the case of a dispute between a provider and a recipient;

(c) the contact details of associations or organisations, includ- ing the centres of the European Consumer Centres Network, from which providers or recipients may obtain practical assistance.

Where appropriate, advice from the competent authorities shall include a simple step-by-step guide. Information and assistance shall be provided in a clear and unambiguous manner, shall be easily accessible at a distance, including by electronic means, and shall be kept up to date.

2. Member States may confer responsibility for the task referred to in paragraph 1 on points of single contact or on any other body, such as the centres of the European Consumer Cen- tres Network, consumer associations or Euro Info Centres.

Member States shall communicate to the Commission the names and contact details of the designated bodies. The Commission shall transmit them to all Member States.

3. In fulfilment of the requirements set out in paragraphs 1 and 2, the body approached by the recipient shall, if necessary, contact the relevant body for the Member State concerned. The latter shall send the information requested as soon as possible to the requesting body which shall forward the information to the recipient. Member States shall ensure that those bodies give each other mutual assistance and shall put in place all possible mea- sures for effective cooperation. Together with the Commission, Member States shall put in place practical arrangements neces- sary for the implementation of paragraph 1.

4. The Commission shall, in accordance with the procedure referred to in Article 40(2), adopt measures for the implementa- tion of paragraphs 1, 2 and 3 of this Article, specifying the tech- nical mechanisms for the exchange of information between the bodies of the various Member States and, in particular, the interoperability of information systems, taking into account com- mon standards.

CHAPTER V

QUALITY OF SERVICES

Article 22

Information on providers and their services

1. Member States shall ensure that providers make the follow- ing information available to the recipient:

(a) the name of the provider, his legal status and form, the geo- graphic address at which he is established and details enabling him to be contacted rapidly and communicated with directly and, as the case may be, by electronic means;

(b) where the provider is registered in a trade or other similar public register, the name of that register and the provider’s registration number, or equivalent means of identification in that register;

(c) where the activity is subject to an authorisation scheme, the particulars of the relevant competent authority or the single point of contact;

(d) where the provider exercises an activity which is subject to VAT, the identification number referred to in Article 22(1) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uni- form basis of assessment (1);

(1) OJ L 145, 13.6.1977, p. 1. Directive as last amended by Directive 2006/18/EC (OJ L 51, 22.2.2006, p. 12).

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(e) in the case of the regulated professions, any professional body or similar institution with which the provider is regis- tered, the professional title and the Member State in which that title has been granted;

(f) the general conditions and clauses, if any, used by the provider;

(g) the existence of contractual clauses, if any, used by the pro- vider concerning the law applicable to the contract and/or the competent courts;

(h) the existence of an after-sales guarantee, if any, not imposed by law;

(i) the price of the service, where a price is pre-determined by the provider for a given type of service;

(j) the main features of the service, if not already apparent from the context;

(k) the insurance or guarantees referred to in Article 23(1), and in particular the contact details of the insurer or guar- antor and the territorial coverage.

2. Member States shall ensure that the information referred to in paragraph 1, according to the provider’s preference:

(a) is supplied by the provider on his own initiative;

(b) is easily accessible to the recipient at the place where the ser- vice is provided or the contract concluded;

(c) can be easily accessed by the recipient electronically by means of an address supplied by the provider;

(d) appears in any information documents supplied to the recipient by the provider which set out a detailed descrip- tion of the service he provides.

3. Member States shall ensure that, at the recipient’s request, providers supply the following additional information:

(a) where the price is not pre-determined by the provider for a given type of service, the price of the service or, if an exact price cannot be given, the method for calculating the price so that it can be checked by the recipient, or a sufficiently detailed estimate;

(b) as regards the regulated professions, a reference to the pro- fessional rules applicable in the Member State of establish- ment and how to access them;

(c) information on their multidisciplinary activities and partner- ships which are directly linked to the service in question and on the measures taken to avoid conflicts of interest. That information shall be included in any information document in which providers give a detailed description of their services;

(d) any codes of conduct to which the provider is subject and the address at which these codes may be consulted by elec- tronic means, specifying the language version available;

(e) where a provider is subject to a code of conduct, or mem- ber of a trade association or professional body which pro- vides for recourse to a non-judicial means of dispute settlement, information in this respect. The provider shall specify how to access detailed information on the character- istics of, and conditions for, the use of non-judicial means of dispute settlement.

4. Member States shall ensure that the information which a provider must supply in accordance with this Chapter is made available or communicated in a clear and unambiguous manner, and in good time before conclusion of the contract or, where there is no written contract, before the service is provided.

5. The information requirements laid down in this Chapter are in addition to requirements already provided for in Commu- nity law and do not prevent Member States from imposing addi- tional information requirements applicable to providers established in their territory.

6. The Commission may, in accordance with the procedure referred to in Article 40(2), specify the content of the informa- tion provided for in paragraphs 1 and 3 of this Article according to the specific nature of certain activities and may specify the practical means of implementing paragraph 2 of this Article.

Article 23

Professional liability insurance and guarantees

1. Member States may ensure that providers whose services present a direct and particular risk to the health or safety of the recipient or a third person, or to the financial security of the recipient, subscribe to professional liability insurance appropri- ate to the nature and extent of the risk, or provide a guarantee or similar arrangement which is equivalent or essentially compa- rable as regards its purpose.

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2. When a provider establishes himself in their territory, Mem- ber States may not require professional liability insurance or a guarantee from the provider where he is already covered by a guarantee which is equivalent, or essentially comparable as regards its purpose and the cover it provides in terms of the insured risk, the insured sum or a ceiling for the guarantee and possible exclusions from the cover, in another Member State in which the provider is already established. Where equivalence is only partial, Member States may require a supplementary guar- antee to cover those aspects not already covered.

When a Member State requires a provider established in its ter- ritory to subscribe to professional liability insurance or to pro- vide another guarantee, that Member State shall accept as sufficient evidence attestations of such insurance cover issued by credit institutions and insurers established in other Member States.

3. Paragraphs 1 and 2 shall not affect professional insurance or guarantee arrangements provided for in other Community instruments.

4. For the implementation of paragraph 1, the Commission may, in accordance with the regulatory procedure referred to in Article 40(2), establish a list of services which exhibit the char- acteristics referred to in paragraph 1 of this Article. The Com- mission may also, in accordance with the procedure referred to in Article 40(3), adopt measures designed to amend non-essential elements of this Directive by supplementing it by establishing common criteria for defining, for the purposes of the insurance or guarantees referred to in paragraph 1 of this Article, what is appropriate to the nature and extent of the risk.

5. For the purpose of this Article

— ‘direct and particular risk’ means a risk arising directly from the provision of the service,

— ‘health and safety’ means, in relation to a recipient or a third person, the prevention of death or serious personal injury,

— ‘financial security’ means, in relation to a recipient, the pre- vention of substantial losses of money or of value of property,

— ‘professional liability insurance’ means insurance taken out by a provider in respect of potential liabilities to recipients and, where applicable, third parties arising out of the provi- sion of the service.

Article 24

Commercial communications by the regulated professions

1. Member States shall remove all total prohibitions on com- mercial communications by the regulated professions.

2. Member States shall ensure that commercial communica- tions by the regulated professions comply with professional rules, in conformity with Community law, which relate, in particular, to the independence, dignity and integrity of the profession, as well as to professional secrecy, in a manner consistent with the specific nature of each profession. Professional rules on commer- cial communications shall be non-discriminatory, justified by an overriding reason relating to the public interest and proportionate.

Article 25

Multidisciplinary activities

1. Member States shall ensure that providers are not made subject to requirements which oblige them to exercise a given specific activity exclusively or which restrict the exercise jointly or in partnership of different activities.

However, the following providers may be made subject to such requirements:

(a) the regulated professions, in so far as is justified in order to guarantee compliance with the rules governing professional ethics and conduct, which vary according to the specific nature of each profession, and is necessary in order to ensure their independence and impartiality;

(b) providers of certification, accreditation, technical monitor- ing, test or trial services, in so far as is justified in order to ensure their independence and impartiality.

2. Where multidisciplinary activities between providers referred to in points (a) and (b) of paragraph 1 are authorised, Member States shall ensure the following:

(a) that conflicts of interest and incompatibilities between cer- tain activities are prevented;

(b) that the independence and impartiality required for certain activities is secured;

(c) that the rules governing professional ethics and conduct for different activities are compatible with one another, espe- cially as regards matters of professional secrecy.

3. In the report referred to in Article 39(1), Member States shall indicate which providers are subject to the requirements laid down in paragraph 1 of this Article, the content of those requirements and the reasons for which they consider them to be justified.

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Article 26

Policy on quality of services

1. Member States shall, in cooperation with the Commission, take accompanying measures to encourage providers to take action on a voluntary basis in order to ensure the quality of ser- vice provision, in particular through use of one of the following methods:

(a) certification or assessment of their activities by independent or accredited bodies;

(b) drawing up their own quality charter or participation in quality charters or labels drawn up by professional bodies at Community level.

2. Member States shall ensure that information on the signifi- cance of certain labels and the criteria for applying labels and other quality marks relating to services can be easily accessed by providers and recipients.

3. Member States shall, in cooperation with the Commission, take accompanying measures to encourage professional bodies, as well as chambers of commerce and craft associationsand con- sumer associations, in their territory to cooperate at Community level in order to promote the quality of service provision, espe- cially by making it easier to assess the competence of a provider.

4. Member States shall, in cooperation with the Commission, take accompanying measures to encourage the development of independent assessments, notably by consumer associations, in relation to the quality and defects of service provision, and, in particular, the development at Community level of comparative trials or testing and the communication of the results.

5. Member States, in cooperation with the Commission, shall encourage the development of voluntary European standards with the aim of facilitating compatibility between services sup- plied by providers in different Member States, information to the recipient and the quality of service provision.

Article 27

Settlement of disputes

1. Member States shall take the general measures necessary to ensure that providers supply contact details, in particular a postal address, fax number or e-mail addressand telephone number to which all recipients, including those resident in another Member State, can send a complaint or a request for information about the service provided. Providers shall supply their legal address if this is not their usual address for correspondence.

Member States shall take the general measures necessary to ensure that providers respond to the complaints referred to in the first subparagraph in the shortest possible time and make their best efforts to find a satisfactory solution.

2. Member States shall take the general measures necessary to ensure that providers are obliged to demonstrate compliance with the obligations laid down in this Directive as to the provision of information and to demonstrate that the information is accurate.

3. Where a financial guarantee is required for compliance with a judicial decision, Member States shall recognise equivalent guar- antees lodged with a credit institution or insurer established in another Member State. Such credit institutions must be autho- rised in a Member State in accordance with Directive 2006/48/EC and such insurers in accordance, as appropriate, with First Coun- cil Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance (1) and Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance (2).

4. Member States shall take the general measures necessary to ensure that providers who are subject to a code of conduct, or are members of a trade association or professional body, which provides for recourse to a non-judicial means of dispute settle- ment inform the recipient thereof and mention that fact in any document which presents their services in detail, specifying how to access detailed information on the characteristics of, and con- ditions for, the use of such a mechanism.

CHAPTER VI

ADMINISTRATIVE COOPERATION

Article 28

Mutual assistance – general obligations

1. Member States shall give each other mutual assistance, and shall put in place measures for effective cooperation with one another, in order to ensure the supervision of providers and the services they provide.

2. For the purposes of this Chapter, Member States shall des- ignate one or more liaison points, the contact details of which shall be communicated to the other Member States and the Com- mission. The Commission shall publish and regularly update the list of liaison points.

(1) OJ L 228, 16.8.1973, p. 3. Directive as last amended by Directive 2005/68/EC of the European Parliament and of the Council (OJ L 323, 9.12.2005, p. 1).

(2) OJ L 345, 19.12.2002, p. 1. Directive as last amended by Directive 2005/68/EC.

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3. Information requests and requests to carry out any checks, inspections and investigations under this Chapter shall be duly motivated, in particular by specifying the reason for the request. Information exchanged shall be used only in respect of the mat- ter for which it was requested.

4. In the event of receiving a request for assistance from com- petent authorities in another Member State, Member States shall ensure that providers established in their territory supply their competent authorities with all the information necessary for supervising their activities in compliance with their national laws.

5. In the event of difficulty in meeting a request for informa- tion or in carrying out checks, inspections or investigations, the Member State in question shall rapidly inform the requesting Member State with a view to finding a solution.

6. Member States shall supply the information requested by other Member States or the Commission by electronic means and within the shortest possible period of time.

7. Member States shall ensure that registers in which provid- ers have been entered, and which may be consulted by the com- petent authorities in their territory, may also be consulted, in accordance with the same conditions, by the equivalent compe- tent authorities of the other Member States.

8. Member States shall communicate to the Commission information on cases where other Member States do not fulfil their obligation of mutual assistance. Where necessary, the Com- mission shall take appropriate steps, including proceedings pro- vided for in Article 226 of the Treaty, in order to ensure that the Member States concerned comply with their obligation of mutual assistance. The Commission shall periodically inform Member States about the functioning of the mutual assistance provisions.

Article 29

Mutual assistance – general obligations for the Member State of establishment

1. With respect to providers providing services in another Member State, the Member State of establishment shall supply information on providers established in its territory when requested to do so by another Member State and, in particular, confirmation that a provider is established in its territory and, to its knowledge, is not exercising his activities in an unlawful manner.

2. The Member State of establishment shall undertake the checks, inspections and investigations requested by another Member State and shall inform the latter of the results and, as the case may be, of the measures taken. In so doing, the compe- tent authorities shall act to the extent permitted by the powers

vested in them in their Member State. The competent authorities can decide on the most appropriate measures to be taken in each individual case in order to meet the request by another Member State.

3. Upon gaining actual knowledge of any conduct or specific acts by a provider established in its territory which provides ser- vices in other Member States, that, to its knowledge, could cause serious damage to the health or safety of persons or to the envi- ronment, the Member State of establishment shall inform all other Member States and the Commission within the shortest possible period of time.

Article 30

Supervision by the Member State of establishment in the event of the temporary movement of a provider to

another Member State

1. With respect to cases not covered by Article 31(1), the Member State of establishment shall ensure that compliance with its requirementsis supervised in conformity with the powers of supervision provided for in its national law, in particular through supervisory measures at the place of establishment of the provider.

2. The Member State of establishment shall not refrain from taking supervisory or enforcement measures in its territory on the grounds that the service has been provided or caused dam- age in another Member State.

3. The obligation laid down in paragraph 1 shall not entail a duty on the part of the Member State of establishment to carry out factual checks and controls in the territory of the Member State where the service is provided. Such checks and controls shall be carried out by the authorities of the Member State where the provider is temporarily operating at the request of the authorities of the Member State of establishment, in accordance with Article 31.

Article 31

Supervision by the Member State where the service is provided in the event of the temporary movement of the

provider

1. With respect to national requirements which may be imposed pursuant to Articles 16 or 17, the Member State where the service is provided is responsible for the supervision of the activity of the provider in its territory. In conformity with Com- munity law, the Member State where the service is provided:

(a) shall take all measures necessary to ensure the provider com- plies with those requirements as regards the access to and the exercise of the activity;

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(b) shall carry out the checks, inspections and investigations nec- essary to supervise the service provided.

2. With respect to requirements other than those referred to in paragraph 1, where a provider moves temporarily to another Member State in order to provide a service without being estab- lished there, the competent authorities of that Member State shall participate in the supervision of the provider in accordance with paragraphs 3 and 4.

3. At the request of the Member State of establishment, the competent authorities of the Member State where the service is provided shall carry out any checks, inspections and investiga- tions necessary for ensuring the effective supervision by the Member State of establishment. In so doing, the competent authorities shall act to the extent permitted by the powers vested in them in their Member State. The competent authorities may decide on the most appropriate measures to be taken in each individual case in order to meet the request by the Member State of establishment.

4. On their own initiative, the competent authorities of the Member State where the service is provided may conduct checks, inspections and investigations on the spot, provided that those checks, inspections or investigations are not discriminatory, are not motivated by the fact that the provider is established in another Member State and are proportionate.

Article 32

Alert mechanism

1. Where a Member State becomes aware of serious specific acts or circumstances relating to a service activity that could cause serious damage to the health or safety of persons or to the envi- ronment in its territory or in the territory of other Member States, that Member State shall inform the Member State of establish- ment, the other Member States concerned and the Commission within the shortest possible period of time.

2. The Commission shall promote and take part in the opera- tion of a European network of Member States’ authorities in order to implement paragraph 1.

3. The Commission shall adopt and regularly update, in accor- dance with the procedure referred to in Article 40(2), detailed rules concerning the management of the network referred to in paragraph 2 of this Article.

Article 33

Information on the good repute of providers

1. Member States shall, at the request of a competent author- ity in another Member State, supply information, in conformity with their national law, on disciplinary or administrative actions or criminal sanctions and decisions concerning insolvency or bankruptcy involving fraud taken by their competent authorities in respect of the provider which are directly relevant to the pro- vider’s competence or professional reliability. The Member State which supplies the information shall inform the provider thereof.

A request made pursuant to the first subparagraph must be duly substantiated, in particular as regards the reasons for the request for information.

2. Sanctions and actions referred to in paragraph 1 shall only be communicated if a final decision has been taken. With regard to other enforceable decisions referred to in paragraph 1, the Member State which supplies the information shall specify whether a particular decision is final or whether an appeal has been lodged in respect of it, in which case the Member State in question should provide an indication of the date when the deci- sion on appeal is expected.

Moreover, that Member State shall specify the provisions of national law pursuant to which the provider was found guilty or penalised.

3. Implementation of paragraphs 1and 2 must comply with rules on the provision of personal dataand with rights guaran- teed to persons found guilty or penalised in the Member States concerned, including by professional bodies. Any information in question which is public shall be accessible to consumers.

Article 34

Accompanying measures

1. The Commission, in cooperation with Member States, shall establish an electronic system for the exchange of information between Member States, taking into account existing informa- tion systems.

2. Member States shall, with the assistance of the Commis- sion, take accompanying measures to facilitate the exchange of officials in charge of the implementation of mutual assistance and training of such officials, including language and computer training.

3. The Commission shall assess the need to establish a multi- annual programme in order to organise relevant exchanges of officials and training.

Article 35

Mutual assistance in the event of case-by-case derogations

1. Where a Member State intends to take a measure pursuant to Article 18, the procedure laid down in paragraphs 2 to 6 of this Article shall apply without prejudice to court proceedings, including preliminary proceedings and acts carried out in the framework of a criminal investigation.

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2. The Member State referred to in paragraph 1 shall ask the Member State of establishment to take measures with regard to the provider, supplying all relevant information on the service in question and the circumstances of the case.

The Member State of establishment shall check, within the short- est possible period of time, whether the provider is operating lawfully and verify the facts underlying the request. It shall inform the requesting Member State within the shortest possible period of time of the measures taken or envisaged or, as the case may be, the reasons why it has not taken any measures.

3. Following communication by the Member State of estab- lishment as provided for in the second subparagraph of para- graph 2, the requesting Member State shall notify the Commission and the Member State of establishment of its inten- tion to take measures, stating the following:

(a) the reasons why it believes the measures taken or envisaged by the Member State of establishment are inadequate;

(b) the reasons why it believes the measures it intends to take fulfil the conditions laid down in Article 18.

4. The measures may not be taken until fifteen working days after the date of notification provided for in paragraph 3.

5. Without prejudice to the possibility for the requesting Member State to take the measures in question upon expiry of the period specified in paragraph 4, the Commission shall, within the shortest possible period of time, examine the compatibility with Community law of the measures notified.

Where the Commission concludes that the measure is incompat- ible with Community law, it shall adopt a decision asking the Member State concerned to refrain from taking the proposed measures or to put an end to the measures in question as a mat- ter of urgency.

6. In the case of urgency, a Member State which intends to take a measure may derogate from paragraphs 2, 3 and 4. In such cases, the measures shall be notified within the shortest pos- sible period of time to the Commission and the Member State of establishment, stating the reasons for which the Member State considers that there is urgency.

Article 36

Implementing measures

In accordance with the procedure referred to in Article 40(3), the Commission shall adopt the implementing measures designed to amend non-essential elements of this Chapter by supplementing it by specifying the time-limits provided for in Articles 28 and 35. The Commission shall also adopt, in accordance with

the procedure referred to in Article 40(2), the practical arrange- ments for the exchange of information by electronic means between Member States, and in particular the interoperability provisions for information systems.

CHAPTER VII

CONVERGENCE PROGRAMME

Article 37

Codes of conduct at Community level

1. Member States shall, in cooperation with the Commission, take accompanying measures to encourage the drawing up at Community level, particularly by professional bodies, organisa- tions and associations, of codes of conduct aimed at facilitating the provision of services or the establishment of a provider in another Member State, in conformity with Community law.

2. Member States shall ensure that the codes of conduct referred to in paragraph 1 are accessible at a distance, by elec- tronic means.

Article 38

Additional harmonisation

The Commission shall assess, by 28 December 2010 the possi- bility of presenting proposals for harmonisation instruments on the following subjects:

(a) access to the activity of judicial recovery of debts;

(b) private security services and transport of cash and valuables.

Article 39

Mutual evaluation

1. By 28 December 2009 at the latest, Member States shall present a report to the Commission, containing the information specified in the following provisions:

(a) Article 9(2), on authorisation schemes;

(b) Article 15(5), on requirements to be evaluated;

(c) Article 25(3), on multidisciplinary activities.

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2. The Commission shall forward the reports provided for in paragraph 1 to the Member States, which shall submit their observations on each of the reports within six months of receipt. Within the same period, the Commission shall consult interested parties on those reports.

3. The Commission shall present the reports and the Member States’ observations to the Committee referred to in Article 40(1), which may make observations.

4. In the light of the observations provided for in para- graphs 2 and 3, the Commission shall, by 28 December 2010 at the latest, present a summary report to the European Parliament and to the Council, accompanied where appropriate by propos- als for additional initiatives.

5. By 28 December 2009 at the latest, Member States shall present a report to the Commission on the national requirements whose application could fall under the third subparagraph of Article 16(1) and the first sentence of Article 16(3), providing reasons why they consider that the application of those require- ments fulfil the criteria referred to in the third subparagraph of Article 16(1) and the first sentence of Article 16(3).

Thereafter, Member States shall transmit to the Commission any changes in their requirements, including new requirements, as referred to above, together with the reasons for them.

The Commission shall communicate the transmitted require- ments to other Member States. Such transmission shall not pre- vent the adoption by Member States of the provisions in question. The Commission shall on an annual basis thereafter provide analyses and orientations on the application of these pro- visions in the context of this Directive.

Article 40

Committee procedure

1. The Commission shall be assisted by a Committee.

2. Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply, having regard to the pro- visions of Article 8 thereof. The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at three months.

3. Where reference is made to this paragraph, Article 5a(1) to (4), and Article 7 of Decision 1999/468/EC shall apply, hav- ing regard to the provisions of Article 8 thereof.

Article 41

Review clause

The Commission, by 28 December 2011 and every three years thereafter, shall present to the European Parliament and to the Council a comprehensive report on the application of this Direc- tive. This report shall, in accordance with Article 16(4), address in particular the application of Article 16. It shall also consider

the need for additional measures for matters excluded from the scope of application of this Directive. It shall be accompanied, where appropriate, by proposals for amendment of this Direc- tive with a view to completing the Internal Market for services.

Article 42

Amendment of Directive 98/27/EC

In the Annex to Directive 98/27/EC of the European Parliament and of the Council of 19 May 1998 on injunctions for the pro- tection of consumers’ interests (1), the following point shall be added:

‘13. Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the inter- nal market (OJ L 376, 27.12.2006, p. 36)’.

Article 43

Protection of personal data

The implementation and application of this Directive and, in particular, the provisions on supervision shall respect the rules on the protection of personal data as provided for in Directives 95/46/EC and 2002/58/EC.

CHAPTER VIII

FINAL PROVISIONS

Article 44

Transposition

1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before 28 December 2009.

They shall forthwith communicate to the Commission the text of those measures.

When Member States adopt these measures, they shall contain a reference to this Directive or shall be accompanied by such a ref- erence on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.

(1) OJ L 166, 11.6.1998, p. 51. Directive as last amended by Directive 2005/29/EC.

L 376/68 EN Official Journal of the European Union 27.12.2006

2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.

Article 45

Entry into force

This Directive shall enter into force on the day following that of its publication in the Official Journal of the European Union.

Article 46

Addressees

This Directive is addressed to the Member States.

Done at Strasbourg, 12 December 2006.

For the European Parliament For the Council The President The President

J. BORRELL FONTELLES M. PEKKARINEN