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

This briefing is one in a series of 'Implementation Appraisals' on the operation of existing EU legislation in practice. Each such briefing focuses on a specific EU law which is likely to be amended or reviewed, as foreseen in the European Commission's Annual Work Programme.

Implementation Appraisals aim to provide a succinct overview of material publicly available on the implementation, application and effectiveness of an EU law to date – drawing on available input from the EU institutions and external organisations. They are provided to assist parliamentary committees in their consideration of the new proposals, once tabled.Article 41 of the Services Directive requires the European Commission to report on the application of the Directive by 28 December 2011 and every three years thereafter.

The EU Services Directive (Directive 2006/123) 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 European Commission was still exploring potential ways to improve the existing procedure, with a view to adopting a proposal for reform in November 2016.

Author: Lorna Schrefler

EP: EPRS: Briefing: Implementation Appraisal: Ex-ante Impact Assessment http://www.europarl.europa.eu/thinktank/en/search.html?policyAreas=EXIMAS

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