European Court of Justice’s ruling on the freedom to provide services in the EU

At a glance

• The European Court of Justice (ECJ) dealt with a reference for a preliminary ruling regarding the freedom to provide services in the European Union.
• The submitting Dutch court asked the ECJ whether the Dutch regulation requiring a residence permit after 90 days was compatible with the freedom to provide services in the EU.
• The ECJ held that this provision is lawful.

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On 20 June 2024, the ECJ dealt with a reference for a preliminary ruling submitted by the rechtbank Den Haag (District Court Den Haag) on the question whether Dutch residence law is consistent with the freedom to provide services in the European Union (case C-540/22) .

The dispute in the main proceedings

A Slovak undertaking has posted Ukrainian workers to a Netherlands company in order to carry out work in the port of Rotterdam. The Ukrainians hold temporary residence permits issued by the Slovak authorities. In accordance with Netherlands law, the Ukrainians must also obtain Netherlands residence permits after the expiry of a 90-day period. In addition, fees are collected for each permit application. 

The competent Dutch court asked the ECJ whether the Dutch regulation requiring a residence permit after 90 days was compatible with the freedom to provide services in the EU. The ECJ held that this provision is lawful. 

Ruling

The ECJ found that the obligation, for service providers established in another Member State, to apply for a residence permit for each posted third-country worker, so that that worker may have a secure document constitutes a measure appropriate for attaining the objective of increasing legal certainty for such workers. The same applies to the objective of ensuring that the employee in question does not pose a threat to public policy. This is also a suitable justification for restricting the freedom to provide services.