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EU Freedom of Establishment. In this essay I will discuss the definition of establishment and consider the relevant case-law which has shaped this fundamental freedom.

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Introduction

David McCabe 11090596 Freedom of Establishment Essay 1 Introduction: 1.1 The freedom of establishment is one of the four fundamental freedoms of the European Union. It is governed by Articles 45-55 of the TFEU. In this essay I will discuss the definition of establishment and consider the relevant case-law which has shaped this fundamental freedom. 2 Definition of establishment: 2.1 Article 49 TFEU states: 'restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State'. It continues; 'Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 54, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.' 2.2 In Factortame II [1991] the ECJ defined establishment as "the actual pursuit of an economic activity through a fixed establishment in another MS for an indefinite period". It thus prohibits the restriction of the free movement of establishment of nationals of the MS. A national of another MS may not be restricted from setting up agencies, branches or subsidiaries 2.3 Self-employed is not defined in the Treaty, but the criteria was laid down in the case of Jany,1 The question before the courts was whether a woman working as window prostitutes in Amsterdam could claim the benefit of freedom of establishment. The ECJ held that there are four requirements for freedom of establishment: * The provision of a service * Outside any relationship of subordination concerning the choice of activity, working conditions and conditions of remuneration * Under the persons own responsibility * In return for remuneration ...read more.

Middle

In particular, these requirements must be objectively necessary in order to ensure compliance with professional rules and must not exceed what is necessary to attain those objectives' 5.6 The ECJ confirmed the applicability of those criteria in Gebhard10. Thus, for a national rule which restricts the freedom f establishment or the freedom to provide services to be compatible, a four part must be satisfied: * the rule must be non-discriminatory * it must be justified by imperative requirements in the general interest * it must be suitable for the attainment of the objective it pursues * it must not go beyond what is necessary in order to attain its objective (the proportionality doctrine) 5.7 Indirect discrimination may be objectively justified or saved by an express derogation for example a national law requiring professionals to hold a licence before they can practice and/or be registered with a professional body, usually after having passed the relevant examinations and holding certain qualifications. Individual has dual burden of satisfying home and then host MS of their suitability to practise, while nationals have only to satisfy only one authority-i.e. that of the home MS. Often the ECJ will allow such indirect discrimination if the requirements can be justified 5.8 In Klopp11 the court ruled that a ban on secondary establishment, used by the Paris Bar was contrary to Article 43 EC. This was a forward-looking judgement in that the Court held that while it was legitimate for the Paris Bar to want to exercise control over lawyers practising locally, a ban on secondary establishment, forcing lawyers to give up their primary establishment, was out of proportion given that lawyers were able to maintain contact with their clients and the French courts through modern methods of transport and tele-communications.12 Where there is indirect discrimination the State may be able to justify rules which are objective13. Other cases have involved more overt forms of discrimination based upon nationality which is contrary to Community law and cannot be justified under one of ...read more.

Conclusion

took 17 years to agree-the lawyers' services Directive was limited in that it only applied to services and not establishment (Directive 77/249 Lawyers' services) 6.10 Single market programme heralded a new approach in the form of horizontal harmonisation based on the principle of mutual recognition derived from ECJ's rulings in Cassis and Vlassopoulou. Instead of attempting to harmonise by profession, known as the sectoral or 'vertical' approach, the Commission adopted a general or 'horizontal' approach, based not on harmonisation but on mutual recognition of qualifications. This applied not just applied to individual professions but to all aeras of activity for which a higher education diploma was required. Directive 89/4823, based on these principles, was approved in December 1988. The Council then agreed a second directive, this time dealing with secondary education24. This directive was also based on the principle of mutual recognition. Both directives have been amended a number of times since they were first enacted, but the basic principles remain. 6.11 In 1999 with Directive 99/42, the Council introduced a directive which covered recognition of qualifications in various commercial and industrial sectors (agriculture, carpentry, hotels and restaurants and textiles). Up until 2007 there were three categories * Professions where specific harmonising directives existed-GPs, dentist, nurse, vets, midwife, pharmacist and architect * All other professions-Accountants, lawyers and bankers where one of the Mutual Recognition Directives applied * Commercial and industrial sectors However Directive 2005/36/EC repealed and replaced earlier directives and it also included the case law of the Court of Justice. This directive was subsequently amended by Directive 2006/100/EC following the accession of Romania and Bulgaria to the EU. The provisons of these directives had to be transposed by MS by the 20th October 2007. They Consolidated earlier professions (regulated professions) (consolidates the three categories above). It not only replaced the mutual recognition directives but also put in one text the following (thus repealed their specific directives): professions of nurse responsible for general care, dental practitioner, veterinary surgeon, midwife, architect, pharmacist and doctor. ...read more.

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