Tag Archives: Free movement of services

Single Market for Services

Single Market for Services

Outline of the Community (European Union) legislation about Single market for services


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for services

Single market for services

Services account for more than 70 % of the economic activity of the Member States and a similar proportion of employment. The freedom to provide services and freedom of establishment, as set out in Articles 49 and 56 of the Treaty on the Functioning of the European Union (TFEU), are therefore essential to the smooth operation of the internal market. In this way, economic operators can pursue a stable, continuous activity in one or more Member States and/or offer temporary services in another Member State without having to be established there.

The European Union is therefore working towards providing frameworks for these two principles in order to guarantee the smooth functioning of the single market for services, and especially cross-border services. The EU has achieved significant progress in the area of certain services. Moreover, in 2006 it adopted the “Services” Directive which aims at removing barriers to trade and services, and at facilitating cross-border operations.

Single market for services Contents

  • Financial services: general framework
  • Financial services: banking
  • Financial services: insurance
  • Financial services: transactions in securities


  • ‘Services’ Directive
  • Posting of workers in the framework of the provision of services
  • The principle of equal treatment for men and women outside the labour market
  • The competitiveness of business-related services
  • System for the recognition of professional qualifications


Liberal professions

  • Competition in professional services

Services of general interest

  • Reform of the EU State aid rules on Services of General Economic Interest
  • New European commitment for services of general interest
  • White Paper on services of general interest
  • Social services of general interest

Road transport

  • Common rules for access to the international road haulage market
  • Common rules for access to the international market for coach and bus services
  • Goods: Non-resident carriers in the national market

Marine transport

  • Freedom to supply services, competition, unfair pricing practices and free access to ocean trade
  • Freedom to provide services within the Member States (ocean trade)
  • Freedom to provide maritime transport services
  • Inland navigation: non-resident carriers
  • Inland navigation: transport of goods or passengers by inland waterway between Member States

Air transport

  • Air service agreements between Member States and third countries

Information society

  • Legal aspects of electronic commerce (“Directive on electronic commerce”)
  • A new framework for electronic communications services
  • Regulatory framework for electronic communications
  • Authorisation of electronic communications networks and services
  • Universal service and users’ rights
  • Access to electronic communications networks
  • Data protection in the electronic communications sector
  • Online gambling (Green Paper)

Postal services

  • The Establishment of an Internal Postal Market

Social services of general interest

Social services of general interest

Outline of the Community (European Union) legislation about Social services of general interest


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for services

Social services of general interest

Document or Iniciative

Communication from the Commission of 26 April 2006, Implementing the Community Lisbon programme: Social services of general interest in the European Union [COM(2006) 177 final – Not published in the Official Journal].


The Member States are given the freedom to define services of general economic interest and particularly social services of general interest, and to define the obligations and missions relating to such services and their organisational principles. On the other hand, the Community framework requires Member States to take certain rules into account when they determine the arrangements for applying the objectives and principles they have established.

This Communication does not deal with health services. In document COM(2006) 122 final, the Commission has undertaken to present a specific initiative for this field.

Social services occupy an important place within European society and the European economy.

Social services often contain one or more of the following organisational characteristics:

  • they operate on the basis of the solidarity principle;
  • they are comprehensive and personalised, integrating the response to differing needs in order to guarantee fundamental human rights and protect the most vulnerable;
  • they are not for profit;
  • they include the participation of voluntary workers;
  • they are strongly rooted in local cultural traditions. This finds its expression in particular in the proximity between the provider of the service and the beneficiary;
  • there is an asymmetric relationship between the provider and the beneficiaries of the service that cannot be assimilated to a ‘normal’ supplier/consumer relationship.

The social service sector, which is in the midst of expansion and experiencing increasing levels of competition, is undergoing a process of modernisation, which may take the following forms:

  • the introduction of benchmarking methods, quality assurance, and the involvement of users in administration;
  • the decentralisation of the organisation of these services to the local or regional level;
  • the outsourcing of public service tasks to the private sector, with the public authorities regulating competition;
  • the development of public-private partnerships and the use of other forms of funding to complement public funding.

The application of Community rules in the area of social services

The Member States must comply with Community law and the case-law of the Court of Justice when establishing the means of implementing the objectives and principles they have set themselves.

When services of an economic nature are involved, the Member States must ensure that their organisational arrangements are compatible with competition law in particular and also with the rules on the freedom to provide services and freedom of establishment.

The Communication focuses on the most common organisational arrangements:

  • the partial or complete delegation of a social mission by the public authorities to an external partner or the creation of a public-private partnership;
  • the granting of public financial compensation to external organisations carrying out a social task of general interest;
  • regulation of the market.

Analysis of the compatibility with Community law of the organisational arrangements for social services must be carried out on a case-by-case basis.

An in-depth consultation on the specific characteristics of social services

The European Commission intends to consult with all the actors involved, namely the Member States and the providers and users of the services. The consultation will look at:

  • the factors constituting these characteristics and their relevance to identifying the specific features of social services of general interest;
  • the ways for the Member States to take these features into consideration when defining tasks of general interest;
  • the experiences with applying Community law in the field of social services of general interest and the possible problems faced in this context;
  • how these characteristics could be considered by the Commission when checking compliance with the applicable Community rules.

In order to improve the mutual knowledge of operators and the Commission in matters relating to the application of Community rules and in order to deepen the exchange of information, a monitoring and dialogue procedure in the form of biennial reports will be established.

In early 2006, the Commission launched a study to collect the necessary information to draft the first biennial report. The information will concern the functioning of the sector, its socio-economic importance, as well as the implications of the application of Community law. The results of the study are expected by mid 2007.


This Communication follows the White Paper on services of general interest and the Social Agenda, which announced a systematic approach to identify and recognise the specific characteristics of social and health services of general interest and to clarify the framework in which they operate and may be modernised. In March 2006, the European Council reiterated the need to maintain the European social model in the complex task of making the internal market for services fully operational.

Related Acts

Communication from the Commission on the Social Agenda

[COM (2005) 33 final – Not published in the Official Journal].

The European Commission proposes a new social policy agenda for the period 2006-2010. The main objective of this new agenda is “a social Europe in the global economy: jobs and opportunities for all”.

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 12 May 2004 entitled ” White Paper on services of general interest

” [COM(2004) 374 final – Not yet published in the Official Journal].

Presented as an extension of the Green Paper on services of general interest, the Commission White Paper describes the European Union’s strategy for promoting the development of high-quality services of general interest. It presents the main elements of a strategy aimed at ensuring that all citizens and enterprises in the Union have access to high-quality and affordable services of general interest.

Commission Green Paper

of 21 May 2003 on services of general interest [COM(2003) 270 final – Official Journal C 76 of 25 March 2004].

The Commission, in this Green Paper, undertakes to conduct a complete review of its policies on services of general interest. Its objective is to organise an open debate on the overall role of the Union in the definition of the objectives of general interest pursued by these services and on how they are organised, funded and evaluated. The Green Paper reaffirms the significant contribution of the internal market and competition rules to modernising and improving the quality and effectiveness of many public services, to the benefit of Europe’s citizens and businesses. It also deals with globalisation and liberalisation, raising the question of whether a general legislative framework should be established at Community level for services of general interest.

'Services' Directive

‘Services’ Directive

Outline of the Community (European Union) legislation about ‘Services’ Directive


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for services

‘Services’ Directive

Document or Iniciative

Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market [Official Journal L 376 of 27 December 2006].


This Directive establishes a general legal framework promoting the exercise of the freedom of establishment for service providers and the free movement of services, while maintaining a high quality of services.

It is based on the following four pillars:

  • to ease freedom of establishment for providers and the freedom of provision of services in the EU;
  • to strengthen rights of recipients of services as users of the latter;
  • to promote the quality of services;
  • to establish effective administrative cooperation among the Member States.


The Directive establishes a general legal framework for any service provided for economic return (with the exception of excluded sectors) while taking the specific nature of certain activities or professions into account.

This Directive covers a wide group of service activities which represent around 40 % of the EU’s GDP and employment. It covers services such as:

  • construction and craft industries;
  • retail trade;
  • the majority of regulated professions (lawyers, architects, engineers and accountants, for example);
  • business services (office maintenance, management consultancy and publicity for example);
  • tourism;
  • real estate services;
  • private education.

Several types of services are excluded from the scope of this Directive, in particular:

  • financial services;
  • telecommunication networks;
  • transport;
  • healthcare services;
  • gambling activities;
  • certain social services.

The Directive is to apply in the following two cases:

  • During the permanent establishment of undertakings, specifically when a particular entrepreneur or undertaking wishes to set up a permanent establishment (a company or branch) in its own country or in another EU country;
  • During cross-border service provision, specifically when an undertaking already established in an EU country wishes to provide services in another EU country, without creating a permanent establishment or when a consumer resident in an EU country wishes to be provided with a service from a supplier in another EU country.

In addition, the Directive also enables the recipients of services, consumers and undertakings in particular, to have greater choice and better access to services in the EU in that:

  • beneficiaries are better informed about service providers, after-sales guarantees and compensation;
  • the Directive prohibits any discrimination based on nationality or the residence of the service beneficiary.

Administrative simplification

The Directive requires Member States to simplify all the procedures used in creating and establishing a service activity. Formal requirements such as the obligation to submit original documents, certified translations or certified copies must be removed, except for certain cases. From December 2009, undertakings and individuals must be able to carry out all the necessary formalities on-line using Points of Single Contact.

Points of single contact are e-government portals set up by the national administration of each EU country. They may be used by service providers to:

  • obtain detailed information on the entrepreneurship abroad or in their country of origin;
  • carry out administrative formalities on-line concerning creating an undertaking;
  • carry out administrative formalities on-line concerning the provision of cross-border services.

Removing legal and administrative barriers to the development of service activities

To ease freedom of establishment, the Directive:

  • includes the obligation to evaluate the compatibility of the authorisation schemes in light of the principles of non-discrimination and proportionality and to maintain certain principles regarding the conditions and procedures of authorisation applicable to service activities;
  • repeals certain legal requirements that remain in the legislation of some Member States and that are no longer justifiable, such as requirements on nationality;
  • contains the obligation to evaluate the compatibility of a certain number of other legal requirements in light of the principles of non-discrimination and proportionality.

Easing the freedom to provide temporary cross-border services

To improve the free provision of services, the Directive stipulates that the Member States must guarantee freedom of access to the service activity and the freedom to exercise such activity throughout their territory. The Member State to which the service provider moves to become established may only enforce its own requirements inasmuch as these are non-discriminatory, proportional and justified for reasons of public order, public safety, public health or environmental protection.

The Directive also provides for a certain number of significant derogations from the principle, as regards, for example, professional qualifications, secondment and services of general economic interest.

Strengthening consumer rights as service users

Within the framework of protecting the rights of recipients, the Directive:

  • affirms the right of recipients to use the services of other Member States;
  • establishes the right of recipients to obtain information on the rules applicable to providers, whatever their location may be, and on the services offered by a service provider.

Ensuring service quality

In this area, the Directive aims to:

  • strengthen the quality of services by encouraging, for example, voluntary certification of activities or drawing up quality charters;
  • encourage European codes of conduct to be drawn up, in particular by professional bodies or associations.

Establishing effective administrative cooperation among the Member States

In order to facilitate the establishment and free movement of services throughout the European Union, the Directive:

  • lays down a legal obligation requiring the Member States to cooperate with the relevant authorities of other Member States in order to ensure efficient control of service activities in the Union while avoiding a multiplication of monitoring. An alert mechanism between Member States is also to be established;
  • constitutes the basis for developing an electronic system for the exchange of information between Member States, which is vital for establishing effective administrative cooperation between them.


Services are the engine of the European economy. They represent around 70 % of employment and the European GDP, and it is in this sector that 9 out of 10 new jobs are created. Within the ‘Lisbon Strategy’, the Commission has responded to the European Council’s invitation to design a policy aiming to remove obstacles to free circulation of goods and services and the freedom of establishment of service provision. This Directive responds to the view that the single market for services no longer provides all the advantages which we have the right to expect. Despite the omnipresence of services in the European economy, services still only represent around one fifth of the total intra-EU trade. The Services Directive was adopted by the Parliament and the Council in December 2006. Member States had a transposition deadline of three years to implement its provisions at national level. The deadline for transposition expired on 28 December 2009.


Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal

Directive 2006/123/EC



OJ L 376/68, 27.12.2006

Related Acts

Commission Decision 2011/130/EU of 25 February 2011 establishing minimum requirements for the cross-border processing of documents signed electronically by competent authorities under Directive 2006/123/EC of the European Parliament and of the Council on services in the internal market [OJ L 53 of 26.2.2011].

This Directive aims at facilitating the verification of electronic signatures when they are used in:

  • originals;
  • certified copies;
  • certified translations.

Member States are required to put in place technical arrangements which enable them to process documents submitted by service providers using points of single contact and which are signed electronically using an XML, CMS or PDF signature.

Communication from the Commission of 27 January 2011: Towards a better functioning Single Market for services – building on the results of the mutual evaluation process of the Services Directive [COM(2011) 20 final – Not published in the Official Journal].

Iceland – Internal market

Iceland – Internal market

Outline of the Community (European Union) legislation about Iceland – Internal market


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single Market for Goods > Single market for goods: external dimension

Iceland – Internal market

acquis) and, more specifically, the priorities identified jointly by the Commission and the candidate countries in the analytical assessment (or ‘screening’) of the EU’s political and legislative acquis. Each year, the Commission reviews the progress made by candidates and evaluates the efforts required before their accession. This monitoring is the subject of annual reports presented to the Council and the European Parliament.

Document or Iniciative

Commission Report [COM(2011) 666 final – SEC(2011) 1202 final – Not published in the Official Journal].


The 2011 Report reported that the country has a high level of alignment with the European Union (EU) acquis due to their participation in the European Economic Area. However, further progress must be made in order to complete alignment, particularly concerning the free movement of goods, workers, services and capital.

EUROPEAN UNION ACQUIS (according to the Commission’s words)

The principle of the free movement of goods implies that products must be traded freely from one part of the Union to another. In a number of sectors, this general principle is complemented by a harmonised regulatory framework, following the “old approach” (imposing precise product specifications) or the “new approach” (imposing general product requirements). The harmonised European product legislation, which has to be transposed, represents the largest part of the acquis under this chapter. In addition, sufficient administrative capacity to notify the restrictions to trade and to apply horizontal and procedural measures in areas such as standardisation, certification, accreditation, metrology and market surveillance is essential.

The acquis in respect of the free movement of workers states that citizens of an EU Member State have the right to work in another Member State. EU migrant workers must be treated in the same manner as national workers with regard to working conditions, social benefits and tax allowances. The acquis also provides a mechanism for coordinating national social security provisions for those tax contributors and their families who move to another Member State.

Member States are required to remove all restrictions with regard to the free movement of services. Member States must ensure that the right of establishment and the freedom to provide services anywhere in the EU is not hampered by national legislation. In some sectors, the acquis prescribes harmonised rules which must be respected if the internal market is to function; this concerns mainly the financial sector (banking, insurance, investment services and securities markets). Financial institutions may carry out their activities throughout the European Union according to the principle of ‘home country control’ by opening branches or by providing cross-border services. The acquis also provides harmonised rules for some specific professions (craftsmen, traders, farmers, commercial agents), for certain information society services, and matters relating to personal data protection.

Member States must remove all restrictions on the free movement of capital between themselves, within the European Union, but also with third countries (with some exceptions) and adopt EU rules applicable to cross-border payments and to credit transfers concerning transferable securities. The money laundering and financing of terrorism directives require banks and other economic operators to identify their clients and be aware of certain operations, particularly in the case of cash transactions for high-value items. In order to tackle financial crime, it is essential that administrative and enforcement capacities are put in place, particularly by establishing cooperation between those authorities responsible for surveillance, implementing law and carrying out criminal proceedings.

The acquis on public procurement covers the general principles of transparency, equal treatment, free competition and non-discrimination. In addition, specific Community rules apply to the coordination and granting of public works, supplies and services contracts for traditional contracting entities and specific sectors. The acquis also defines the rules relating to the court procedures and means of action available. Its implementation requires specialised bodies.

The acquis relating to intellectual property rights defines the harmonised rules for the legal protection of copyright and related rights. Specific provisions are applicable to the protection of databases, data processing programmes, topographies of semi-conductors, satellite broadcasting and cable retransmission. In the field of intellectual property rights, the acquis details harmonised rules for the legal protection of trademarks and designs. Other specific provisions apply to biotechnological inventions and to pharmaceutical and phytopharmaceutical products. The acquis also establishes a Community trademark system and a Community design system.

The acquis on company law includes rules applicable to the constitution, registration, merger and division of companies. In the field of financial information, the acquis specifies the rules to be complied with regarding the presentation of consolidated annual accounts and provides simplified rules for small and medium-sized enterprises, in particular. The application of international accounting standards is obligatory for certain entities of public interest. Furthermore, the acquis also includes provisions relating to the approval, professional integrity and independence of persons responsible for legal controls.

The Customs union
acquis consists almost exclusively of legislation which is directly binding on the Member States. It includes the Community’s Customs Code and its implementing provisions; the Combined Nomenclature, Common Customs Tariff and provisions on tariff classification, customs duty relief, duty suspensions and certain tariff quotas; and other provisions such as those on customs control of counterfeit and pirated goods, drugs precursors and the export of cultural goods and on mutual administrative assistance in customs matters and transit. Member States must also have the required implementing capacities, particularly connectivity with the EU’s computerised customs systems. Customs authorities must also have sufficient capacity for implementation and compliance with the specific provisions established in related fields of the acquis, such as foreign trade.

EVALUATION (according to the Commission’s words)

Iceland maintains a high level of alignment with the acquis on the free movement of goods. Further improvement is required concerning horizontal measures and product legislation under the ‘Old Approach’ (which imposes precise product specifications in opposition to the ‘New Approach’ which imposes general specifications which products must meet), particularly in the automobile sector.

Similarly, the country has already achieved a high level of alignment on the free movement of workers. Preparations are continuing to implement the new regulations on the coordination of social security.

Alignment concerning the right of establishment and the freedom to provide services is satisfactory. However, alignment with the Services Directive and transposition of the third postal services directive is not complete. The administrative capacity must be strengthened in order to implement the EU rules and policies effectively. Finally, the country achieved a good level of alignment on financial services, although the reforms remain partially introduced. Implementation of European provisions is incomplete in certain key sectors, such as the insurance and securities sectors, and the monitoring capacity must be improved. The Icesave dispute remains unresolved.

Iceland largely applies the acquis on the free movement of capital, although it is still incomplete due to the large restrictions still applicable to capital. The legal framework has been strengthened, and the administrative capacity of the financial information unit must be improved.

The country achieved a high level of alignment on intellectual property rights and its administrative capacity is appropriate. Measures have been taken to improve the application of provisions.

Implementation of the EU acquis is satisfactory in the field of company law. However, alignment is not yet complete concerning accounting standards and international audit standards.

Customs legislation is largely aligned, although legislative discrepancies still need to be addressed, particularly concerning customs rules, procedures with economic impact, duty free and security aspects. The administrative capacity of the country is insufficient in this field. Lastly, preparations to implement the acquis effectively must be made, particularly concerning the interconnectivity of the European and Icelandic IT customs systems.

Food Safety

Food Safety

Outline of the Community (European Union) legislation about Food safety


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Food safety

Food safety

The objective of the European Union’s food safety policy is to protect consumer health and interests while guaranteeing the smooth operation of the single market. In order to achieve this objective, the EU ensures that control standards are established and adhered to as regards food and food product hygiene, animal health and welfare, plant health and preventing the risk of contamination from external substances. It also lays down rules on appropriate labelling for these foodstuffs and food products.

This policy underwent reform in the early 2000s, in line with the approach ‘From the Farm to the Fork’, thereby guaranteeing a high level of safety for foodstuffs and food products marketed within the EU, at all stages of the production and distribution chains. This approach involves both food products produced within the European Union and those imported from third countries.

Food safety Contents

  • Food safety: general provisions: General and institutional provisions, Research
  • Veterinary checks, animal health rules, food higiene:The hygiene package, Intra-community trade, Production and placing on the market
  • Animal nutrition: Offical controls, Additives, Genetically modified feedingstuffs, Animal waste and pathogenic agents
  • Animal welfare: Livestock farming, Transportation, Slaughter
  • Animal health: BSE, Foot and mouth disease, Swine fevers, Avian influence
  • Plant health checks: Phytopharmaceutical products, Pesticide residues, Harmful organisms
  • Contamination and environmental factors: Chemical products, Substances with a hormonal effect, Contact with foodstuffs, GMOs, Radioactive contamination
  • International dimension and enlargement: International cooperation, Enlargement
  • Specific themes: GMOs, BSE, Foot and mouth disease

See also

Product labelling and packaging
European Commission Health and Consumer Protection Directorate-General