SUP App 3.8 Avoidance

The European Commission has stated that "it should be ensured that an institution is not able artificially to connect its activities to the arrangements governing freedom to provide services as a way of side-stepping the legal and tax framework which would apply in the same activity were considered to be carried on by a branch or by any other form of establishment" (Commission interpretative communication: Freedom to provide services and the interests of the general good in the Second Banking Directive' (97/C 209/04)).

The European Court has also acknowledged that, in certain circumstances, an EEA State "is entitled to take steps to prevent a service provider...from exercising the freedom to provide services...". The circumstances are where "a service provider whose activity is entirely or mainly directed towards its territory, but who has become established in another Member State in order to circumvent the rules of professional conduct that would apply to him if he were established in the territory of the State where he entirely or mainly pursues his activities..." (Commission interpretative communication: Freedom to provide services and the interests of the general good in the Second Banking Directive (97/C 209/04)).