First of all, do not use the List type as a return type form a web service method. Use arrays instead.
JAXB, who is responsible for marshalling and unmarshalling XML data does not know about Lists, since this is not a simple Java type.
Arrays, however, is no problem for JAXB.
Second, when querying for entities from a database or such, be sure not to use lazy loading and also detach the entities from the entity context before returning them.
This because if you, for instance, use lazy loading and return entities which data is not completely loaded, then there may be problems if the entity context is closed when the serialization of the entities to XML is done.