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Free Movement of the Self-Employed - What types of national provisions may…
Free Movement of the Self-Employed - What types of national provisions may interfere
Provisions restricting the taking up and pursuit of self-employed activities
Discriminatory
Requirement of nationality to practice as a lawyer (Reyners, case 2/74)
Case was about a Belgian law requiring that to practice law in Belgium one must have Belgian nationality. Discriminatory measure because it is based on nationality and restricts freedom of establishment
Reyners was about a Belgian requirement that one has Belgian nationality to practice law in Belgium. Clearly violates freedom of establishment
Local authority’s refusal to rent premises to a foreigner (Steinhauser, case 197/84)
Case was about a German artist who wanted to rent a fisherman’s shed, the local authority refused his request because he is not a French national. Courts then found that this constituted discrimination on grounds of nationality and also found that the renting of premises for business purposes pertains to the pursuit of self employed activities and therefore fell under the scope of article 49 TFEU the right of establishment
Steinhauser: case about a German artist who wanted to rent a fisherman’s shed to paint in Biarritz, France. Local authority refuses because he is not a French national. Court finds that this is discriminatory and it is prohibited because the renting of premises for business purposes pertains to the pursuit of self-employed activity
Equally applicable
Prohibition on retaining an establishment in two Member States (Klopp case 107/83)
Case about German lawyer practicing in Dusseldorf who wanted to open chambers in Paris. French law prohibits anyone from practicing law in France unless they have their principal office in Paris. This is equally applicable, but likely to disadvantage in effect non-nationals. The court clarifies that right of establishment includes freedom to set up more than one place of work in the Community.
Case about German lawyer practicing in Dusseldorf who wanted to open chambers in Paris. The French law prohibited anyone from practising law in France unless they have the principle office in Paris. This is also a prohibition that on the surface is equally applicable, as it applies regardless of nationality but it is likely to disadvantage in fact non-nationals. Court clarified that the right to establishment includes freedom to set up more than one place of work in the community.
Authorizations to set up/pursue an activity
Kraus case C-19/92
German rules on authorization required to use in Germany a postgraduate title obtained in another MS. Court treats it as an authorization for purposes of establishment. Kraus had LLM from UK. Court finds that such an authorization regime is not precluded in principles and may be tied to legitimate interest in avoiding abuse of titles, however authorization procedure must be limited to verifying whether title had been properly awarded. It is for national court to decide whether it is proportional.
This was related to certain German rules which required authorization to use a postgraduate title obtained in another MS in Germany. In this case an LLM from the UK. The Court found that such an authorization regime in principle is not precluded because it might be connected to the pursuit of a legitimate interest, for instance avoiding the abuse of titles. However, the authorization procedure must be limited to verifying whether the title had been properly awarded and it is for the national courts to decide if the measure in question is proportional
These are now even the subject of regulation under directive 2006/123
Regulation of authorizations for establishment Directive 2006/123 (Services Directive) articles 9-14
Provisions affecting the rights of self-employed persons in a host MS
Direct Discrimination
Commission v Italy (social housing), case 63/86: rule whereby only Italians can purchase, or lease houses built with public funds and have access to reduced rate mortgage breaches art. 49 TFEU (direct discrimination)
Indirect Discrimination
Application of non-resident tax rate to person who works in the Netherlands but resides in Belgium (Asscher, case C-107/94) (indirect discrimination)
Question of whether there is direct or indirect discrimination in respect of tax benefits and exemptions, social benefits, housing etc
Provisions otherwise discouraging or making less attractive the exercise of movement for purposes of establishment
And this is the residual, catch all category, that comes directly from the Gebhard test.
Freedom of establishment also applies in the state of nationality (Knoors)
Also, Knoors clarifies that freedom of establishment also applies in the MS of nationality, if a person has moved and come back. Knoors was a Dutch plumber who had worked several years in Belgium and upon returning to the Netherlands to set up an activity, he was denied the authorization because he lacked the relevant Dutch training. This was found to violate freedom of establishment.
Belgian exemption from paying social security contributions as self-employed for persons who have another main occupation in Belgium (Stanton, case C-143/87)
Here Stanton was working as a self-employed person in Belgium, but was also working as an employee in the UK and the latter was his main activity. Belgium exempted persons from paying social security contributions as self-employed persons, if they were also paying social security contributions as workers. But only if they were working in Belgium. Again considered to be provision discouraging people from establishing in another MS.
Stanton is a clear case of indistinctly applicable that is not even indirectly discriminatory. It just hinders free movement.
Indirectly discriminatory
Is a measure that albeit not targeting foreigners on its face, has the effect of disadvantaging foreigners and perhaps also the intention.
Indistinctly Applicable
Applies to everybody no matter what. And indistinctly applicable provisions in some cases will not be ok because they have a disproportionate effect on foreigners. Sometimes will not be ok because they just discourage free movement.