Much of the interaction today within the EU is now service-related transactions versus the transaction of goods.
The provisions of Article 56 of the Treaty on the Functioning of the European Union (TFEU), restrictions on the provision of services within the EU shall not be restricted between nationals of the Union. However, nationals of countries outside the EU can be restricted by the EU.
As defined by Article 57 TFEU, services are defined exceptionally broadly to capture most economic activity, such as:
- Activities of an industrial or commercial character
- Activities of the professions
- Activities of craftsmen
The treaty also covers services provided “free of charge” if they are traditionally compensated. This challenges some quasi-public areas, such as education, healthcare, and other traditionally quasi-governmental services.
Domestic rules cover the service regulation, and any EU national shall be permitted to temporarily perform the services if they meet the exact requirements. The work of the EU harmonizes the requirements over time, but some areas – such as the law – will be slower to integrate. The EU has been attempting to harmonize through directives, which take precedence over the provisions of the TFEU.
Article 61 TFEU takes precedence over Article 18 TFEU in the case of most specialized services and should be referred to in case of a potential conflict.
As in most of the TFEU provisions, there are exceptions under Article 62 TFEU. Restrictions on the freedom of movement of services may be restricted based on the needs of:
- Public Policy
- Public Security
- Public Health
- Public Authority
- Rule of Reason (van Binsbergen C-33/74)
Economic objectives are not permitted. Under the provisions of Binsbergen, the ECJ developed a test that requires that:
- The restriction must not be subject to harmonization with EU law
- The restriction must be in the public interest, such as consumer protection, fraud prevention, etc.
- The national rule must apply without distinction or discrimination
- The measure must be proportionate and the least restrictive method to achieve the aim
The movement of services applies to both public and non-public organizations, mainly if the services are provided cross-border where the services are prepared remotely.