Notifications of new restrictions on services Reforming the existing procedure under the Services Directive

20-09-2016

The EU Services Directive provides for a series of tools to facilitate intra-EU trade in services and eliminate or prevent barriers in the internal market. The notification procedure outlined in Articles 15 and 39 of the directive requires Member States to notify any new or modified requirement adopted at the national level, so that the European Commission and other Member States can evaluate and comment on its potential impact on cross-border trade in services. Various assessments of the existing notification procedure have shown that it has been ineffective in fully monitoring the emergence of new barriers in EU services markets. Suffice it to say that the overall number of services notifications communicated through the IMI system pales in comparison with the number of notified measures in the market for products and information society services. In addition, the services notification procedure does not always ensure that new national requirements are proportionate, non-discriminatory and justified by public interest objectives. Some institutional actors have reported that the proportionality assessments provided by Member States to justify the adoption of a given restriction in the services sector are not always thorough. Some of the shortcomings of the current notification procedure derive from its less stringent nature when compared with its equivalent for products and information society services. Indeed, the lack of an obligation to notify draft measures and the absence of clarity on sanction mechanisms for non-notification, for instance, contribute to legal uncertainty and ineffective implementation of this particular aspect of the EU Services Directive. In addition, the inability for non-institutional stakeholders to consult and comment on notified measures reduces the possibilities to address potential new barriers in a timely manner. At the time of writing this briefing, the Commission was still exploring potential ways to improve the existing procedure, with a view to adopting a proposal for reform in November 2016.

The EU Services Directive provides for a series of tools to facilitate intra-EU trade in services and eliminate or prevent barriers in the internal market. The notification procedure outlined in Articles 15 and 39 of the directive requires Member States to notify any new or modified requirement adopted at the national level, so that the European Commission and other Member States can evaluate and comment on its potential impact on cross-border trade in services. Various assessments of the existing notification procedure have shown that it has been ineffective in fully monitoring the emergence of new barriers in EU services markets. Suffice it to say that the overall number of services notifications communicated through the IMI system pales in comparison with the number of notified measures in the market for products and information society services. In addition, the services notification procedure does not always ensure that new national requirements are proportionate, non-discriminatory and justified by public interest objectives. Some institutional actors have reported that the proportionality assessments provided by Member States to justify the adoption of a given restriction in the services sector are not always thorough. Some of the shortcomings of the current notification procedure derive from its less stringent nature when compared with its equivalent for products and information society services. Indeed, the lack of an obligation to notify draft measures and the absence of clarity on sanction mechanisms for non-notification, for instance, contribute to legal uncertainty and ineffective implementation of this particular aspect of the EU Services Directive. In addition, the inability for non-institutional stakeholders to consult and comment on notified measures reduces the possibilities to address potential new barriers in a timely manner. At the time of writing this briefing, the Commission was still exploring potential ways to improve the existing procedure, with a view to adopting a proposal for reform in November 2016.