Services account for almost 70% of GDP in the EU. In 2001 there were 91 barriers facing service providers to EU countries according to the State of the Internal Market survey completed in 2002 by the EU Commission. Barriers included such difficulties as promotion, provision of additional documentation or legal assistance.
The Directive’s provisions will allow SMEs to test new EU markets without the need to set up there, which at the moment is prohibitively expensive. The single point of contact will also help SMEs to take advantage of the more open market by providing a single resource to find out how they can offer services in each Member State.
Why has it been introduced?
The introduction of the Directive is to eliminate unjustified barriers to trade, therefore, making it easier for service companies to set up and do business in other EU countries. The Directive is currently in force, however Member States are not required to fully implement it until 27 December 2009 so benefits may not be seen until after this date.
How will the Directive be implemented?
Administration procedures will be simplified by the requirement for Members States to provide one or more Points of Single Contact for service providers wishing to operate in other Member States. By ensuring freedom to provide services and the freedom of establishment are upheld. Members States must ensure regulators and competent authorities cooperate across borders.
What are the benefits?
There are benefits for both UK consumers and businesses. UK Consumers can expect to receive greater choice and lower prices and businesses can expect to receive more business. Significant benefits to the UK economy, business and consumers are estimated at £5 billion year on year.
What is excluded?
The Directive does not include: financial services; electronic communications and networks (to the extent that they are covered by the European Community telecoms legislation package);transport and transport-related services falling under TEC Title V and including port services; healthcare services; services of temporary work agencies; audiovisual services; gambling activities; activities connected with the exercise of official authority; social services relating to social housing, childcare and support of families and persons in need; private security services; notaries; bailiffs and all taxation. Labour law and criminal law are also excluded.
What do I need to do?
Consider how this could affect your business and take steps to benefit from the opportunities or protect your business from threats facing your business. Companies used as case studies for the Impact of Proposed EU Directive on Services in the Internal Market report believed that the UK market was already very open to competition from firms from other EU Member States and therefore, there would be no additional threat as a result of the Services Directive. To find out more about how it will affect your business visit the links below.
Impact of the proposed EU Directive on Services in the Internal Market: case studies of UK businesses – http://www.dti.gov.uk/files/file22899.pdf
State of the Internal Market (2002) EU Commission- http://europa.eu.int/eur-lex/en/com/rpt/2002/com2002_0441en01.pdf
DIRECTIVE 2006/123/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 12 December 2006 on services in the internal market