The European Commission has published proposals to improve the free flow of services around the EU in an effort to unlock European businesses’ potential, increase productivity and job creation and deliver benefits to consumers through greater competition.

The aim of the Directive is to cut excessive red tape that prevents businesses from offering their services across borders or from opening premises in other Member States.

Information about the progress of the Directive through Council Working Groups and the Competitiveness Council can be accessed here.

The key elements of the Commission’s proposals are:

Freedom to establish a business in another Member State: A review by all Member States of the administrative procedures they require foreign service providers to complete in order to establish on their territory ie that these be in line with EU law, non-discriminatory and proportionate. Also:

• creation of single points of contact where providers can comply with all necessary formalities

• simplification of authorisation procedures to make them more transparent;

• easy availability and provision of intelligible information;

Freedom to provide services abroad, without being established there:  Application of the principle of mutual recognition on the basis of country of origin. This would mean a business based in one Member State would be able to provide its services to customers in another Member State, where it is not established, on the basis of the regulations of its home country.

The Directive will have implications for traditional service companies as well as manufacturers who are recipients of services but also increasingly provide add-on services to their customers.

The UK strongly supports the market-opening aim of the Commission’s proposals and shares its’ objective to see the Internal Market become a reality for services as well as goods.

Following the analysis of the responses to our consultation with stakeholders, during the negotiations we will seek to achieve the following main objectives:

We recognise that considerable work will be needed to develop workable practical solutions in many areas, including single points of contact and the mutual assistance procedures governing the supervision of providers of temporary services (particularly in cases of urgency).

Information about the progress of the Directive through Council Working Groups and the Competitiveness Council can be accessed here.

The UK Government launched a consultation on the proposals at the end of March 2004. It sought views from interested parties to inform the UK Government position for the forthcoming negotiations. The consultation document also included a partial Regulatory Impact Assessment. The consultation period ended on 30 June 2004.

A total of 116 responses were received and a summary of these responses is published below.

These responses, along with the views of other government departments, have now been analysed and taken into account by the Government in developing the lines that the UK will take in the detailed negotiations on this Proposal. The Government Response is published below along with a partial Regulatory Impact Assessment.

Government response (8 pages)
Regulatory Impact Assessment (67 pages).Summary of responses (17 pages)Consultation document (154 pages)

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