Provisional retroactive withdrawal of A1 certificates

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A decision made by the Slovak social security competent authority on 20 December 2016, reopens now the judicial debate on retroactive withdrawals of A1 certificates.

The ECJ rulings in Altun (C-359/16) and Vueling Airlines (C-370/17 and C-37/18) postdating that decision, raise a high degree of uncertainty about their practical implementation.

In a recent request for a preliminary ruling (C-410/21), the Belgian Court of Cassation aims to clarify the value of the “provisional retroactive withdrawal” of A1 certificates, in the light of Article 5 of Regulation 987/2009, and of ECJ case-law.

The case in the main proceedings is concerned with one of the “intellectual arrangements” meant to circumvent a correct determination of the applicable legislation for social security, and to take advantage of the (wrongful) determination (i.e., fraud).

In the light of evidence collected in the course of judicial investigation, the Belgian competent authority addressed the Slovak competent authority with a request to verify an element should have been decisive in determining the applicable legislation (i.e., the genuine existence of an economic activity).

The Slovak competent authority has confirmed the non-existence of an economic activity.

The Belgian competent authority made an application to the Slovak competent authority for the review and withdrawal of the A1 certificates fraudulently obtained and relied on.

The Slovak competent authority has decided to provisionally withdraw the A1 certificates concerned, the final decision (i.e., on the “final” withdrawal) pending i) the outcome of the judicial procedure initiated in Belgium, and ii) the assessment and interpretation of the Belgian court ruling by the Slovak competent authority.

The A1 certificates were provisionally withdrawn in view of facilitating the judicial proceedings (“no longer have binding force”), however, the employees remained subject to the social security system in Slovakia.

The ECJ’s failure to take a clear position on withdrawal of A1 certificates in situations of fraud and abuse of right brings an additional degree of complexity in addressing the case at hand.

Interpreting the case at hand in the light of the ECJ ruling in Altun, the issuing institution has taken into consideration evidence collected in the course of judicial investigation which supports the conclusion that A1 certificates were fraudulently obtained and relied on, however, made an ambiguous decision unlikely supported by the social security coordination regulations as interpreted by ECJ case-law, and practically jeopardizing the possible application of the ruling in Altun. That decision jeopardizes somewhat the procedure laid down in Article 5 Regulation 987/2009 as well (prima facie there is no disagreement between the institutions concerned).

In DRV Intertrans BV(C-410/21), the request for preliminary ruling is meant to cover any possible outcome:

  • the first question is meant to address a situation in which the ECJ will find provisional retroactive withdrawal of A1 certificates as not being merely precluded by the social security coordination regulations, however, in that case “the presumption attached to the Al certificates that the workers concerned are properly affiliated to the social security system of that issuing Member State ceases to apply and those Al certificates are no longer binding on the authorities of the Member State of employment” (“slightly” different position from the position taken by the Slovak  competent authority : “all 11 employees will remain subject to Slovak social security”)
  • in the event that the ECJ will find provisional retroactive withdrawal of A1 certificates as being precluded by the social security coordination regulations, the Slovak competent authority will be compelled to i) withdraw the A1 certificates, or, ii) refuse to withdraw by giving reason(unlikely considering the grounds, and in my view, in the case at hand, such a situation might trigger the relevance of the ruling in Altun), or, iii) step back and disregard the evidence collected in the course of the judicial investigation, and that will trigger the relevance of the ECJ ruling in Altun
  • the second related question is meant to address a situation in which the provisional retroactive withdrawal of A1 certificates in the case at hand, will be considered by the ECJ as sufficient grounds for disregarding the said certificates, in the meaning of recent ECJ case-law

The third question referred by the Belgian Court of Cassation is concerned with the determination of the “registered office or place of business” in the meaning of Art 13(1)(b)(i) of Regulation 883/2004, read in conjunction with Articles (3)(1)(a) and 11(1) of Regulation 1071/2009 and Article (4)(1)(a) of Regulation 1072/2009, in the same situation of irrefutable fraud.

Tanel Feldman

Senior Partner , Immigration Law Associates

Immigration Law Associates provides in-depth advice on rights and obligations triggered by the cross-border element of a given legal situation. Our know-how is built on an extensive experience in EU law and is supported by a network of partners across the EU. Social security coordination : • Autonomous application of the social security coordination regulations and ECJ case-law, to any situation involves a cross-border element EU Company law : • Establishment -permanent activities • Establishment -self-employment activities International Private Law : • Law applicable to the employment relationship Labour and employment law : • Freedom of movement of workers-equal treatment, access to social benefits • Employment contracts and termination of employment • Working conditions • Employee benefits • Transfer of undertakings • Authorisations of work for third-country nationals Special regimes : • Posted workers • Frontier workers • Highly mobile workers • Employment of record • Intra-EU mobility of third-country nationals