In Belgium, the SIRS/SIOD 2022 “Action Plan fight against social fraud” focuses inter alia on tackling the so called “Brazilian chains”.
Third-country nationals, regularised on grounds of a permissive immigration law in Portugal, are “posted” by Portuguese companies (often “letterbox companies”), to carry out work in Belgium (essentially in the construction sector).
In 2022, at least 200 out of the 2000 investigations planned to tackle social dumping, could be focused on “Brazilian chains”.
Belgium disposes of a reinforced arsenal to tackle social dumping in general, and “Brazilian chains” in particular:
- datamining capacity (NSSO-NISSE-CSL)
- inspectors appointed for investigations related to social dumping (NSSO-NISSE-CSL)
- the ECJ ruling in Altun and Others (C-359/16)- national courts may, in certain conditions, disregard A1 Certificates fraudulently obtained or relied on
- a recent ruling of the Court of Cassation (applying to the national context the ECJ ruling in Bouygues and Others C-17/19): A1 Certificates issued by a competent foreign authority, do not exclude the obligation to make the immediate declaration of employment (Dimona), where such a declaration is required (e.g., situations in which a declared “posting scenario” is deemed employment in Belgium, and not assignment to Belgium)
What does that mean?
Experts in cross-border “intellectual arrangements”, are facing a datamining system designed to spot red lights that are specific to any such arrangement.
Specialised and experienced inspectors will audit and collect means of evidence.
The NSSO may decide to address the competent authority having issued the A1 Certificate, with a request to withdraw it (subsequently, provided that the A1 Certificate was not withdrawn, a national court may enforce the ECJ ruling in Altun and disregard that certificate).
In any circumstances, regardless of whether the A1 Certificate was withdrawn or not, situations in which a declared “posting scenario” is deemed employment, trigger the failure to make the immediate declaration of employment (with retroactive effect).
Failure to make the immediate declaration of employment (Dimona), gives rise to a breach sanctioned by the Social Criminal Code (imprisonment 6 months to 3 years and/or a criminal fine of EUR 4.800 to EUR 48.000, or administrative fine of EUR 2.400 to EUR 24.000). The fine is multiplied by the number of workers concerned.
Example: “U turn” posting scenarios, by means of establishing letter box companies - the workers concerned are deemed employed by the Belgian “recipient of services”.
In simple words, not only the social security “savings” are at risk, but criminal sanctions are highly foreseeable as well (on behalf of the employer, his servant, or his agent).
Recently, the Belgian Court of Cassation confirmed a ruling in which overall sentences of 12 months imprisonment and EUR 464.000 criminal fines were imposed. The case is concerned with “posting” of drivers in the transport sector. Unrelated to the so called “Brazilian chains”, however, fraudulent arrangements are “equally” treated, regardless of their source.