ARTICLES
Europe Watch
A short round-up of EU News
by Helen H. Whelan
The Services Directive
The Directive on liberalisation of the service market was adopted in November 2006 and was to be implemented by 1st January 2010. The aim was to unleash the potential of the internal market in the service sector which accounts for around 70% of the EU economy. The Commission has estimated that proper application of the new rules could generate 1% growth in the EU. But months after the deadline for transposition, only 21 Member States have notified the Commission that they have completed the process.
Member States are required to eliminate administrative barriers to the free movement of services under the Directives provisions. The new rules are intended to make life easier for businesses wishing to provide services abroad. Electronic 'one-stop shops' are supposed to enable firms to access information and complete formalities quickly. These facilities exist but some are still 'first generation': they supply information but do not process the formalities. In addition, they are usually only available in the national language.
The Directive applies to both private professionals and businesses and includes:-
- Business Services such as management consultancies, facilities management (including office maintenance and security), advertising, recruiting, services of intellectual property rights and services of commercial agents;
- Services provided both to businesses and consumers like legal or fiscal advice, real-estate services, construction (including architects), distributive trades, car rental and travel agencies; and
- Consumer services like tourism, leisure services, sports centres and amusement parks.
Excluded services include:
- Public and private healthcare and social services, such as social housing, childcare and family services;
- Industries already covered by sector specific legislation such as financial services, electronic communications and transport (including postal services);
- Audio visual services; and
- Gambling and lotteries.
Consumer Benefits
Service providers are not allowed to discriminate in their general conditions of access to a service between recipients on the basis of their nationality or place of residence; this is particularly relevant in the e-commerce context. Service providers will have to make information easily available to recipients about themselves and their services, so that service recipients, in particular consumers, are clearly informed about who they are dealing with, what services are being offered and under what conditions and prices.
The big question is when EU Member States will finally complete the process of bringing the directive into their national law systems. One report in February 2009 found only nine of the 27 member states had complied fully with the deadline. Ireland, Greece, Italy and Slovenia were particularly far behind. The Commission has said it will begin infringement proceedings, but only as a means to push EU countries towards final implementation.
European Company Statute
An EU study shows that the European Company Statute (SE) is almost unused in Ireland. The SE allows companies operating in more than one Member State to re-organise their cross-border business under one European label. Just one SE is registered in Ireland. Some well-know companies already using the SE include Allianz and Porsche. The dominant activity for SEs is the service area with 31% engaged in financial and insurance services and 27% for other services. The SE was expected to reduce internal costs of operating across borders and hence be more competitive in the Internal Market.
The European Private Company or SPE is still caught up in the legislative process with a compromise proposal given to the European Council last December (see our December 2008 Newsletter).
Consumer Credit Directive
The Consumer Credit Directive ('CCD') establishes a harmonised legal framework in the European Union for the provision of consumer credit ranging from €200 up to €75,000. It replaces an earlier Directive from 1987 which laid down minimum rules for consumer credit arrangements within the EU and which was transposed into Irish law by the Consumer Credit Act 1995.
The CCD applies to certain types of credit advanced to 'consumers' who are defined as natural persons 'acting for purposes which are outside their trade, business or profession'. Therefore the CCD like the Consumer Credit Act only protects individuals borrowing for non-business purposes. The CCD contains conduct of business provisions which include obligations on lenders to provide standard pre-contractual information, a duty to provide adequate explanations to consumers to enable them to assess whether the credit product is adapted to their needs and financial situation and a fourteen day withdrawal period.
The Directive is required to be implemented by 11 June 2010.