A new weapon in the fight against cross-border social security fraud?

According to the European Court of Justice, the validity of European A1 (formerly E101) forms, which determine whether a worker or self-employed person moving within the European Union is insured under the social security system in the issuing Member State, is not absolute in cases of manifest fraud.


Monica De Jonghe, COMPETENCE CENTRE LABOUR & SOCIAL SECURITY
08 March 2018

In a case concerning fraudulent practices used by a Belgian construction company and some Bulgarian subcontractors, through which Bulgarian construction workers were hired under the guise of secondment, the European Court of Justice (ECJ) ruled for the first time that the Belgian judicial authorities could disregard the fraudulent A1 forms in question and subject the workers in question to Belgium's social security scheme.

Responding to an interlocutory question by the Court of Cassation, the ECJ justified its ruling on 6 February 2018 by invoking the principle that EU regulations could not be extended to cover operations carried out for the purpose of fraudulently or improperly benefiting from advantages arising from provisions of EU law.

However, the Court sets some clear limits to prevent Member States from too easily cancelling the validity of A1 declarations:

(1) the Belgian authorities had irrefutably established that the conditions for secondment were not fulfilled;
(2) the prescribed procedure before the Administrative Commission was followed but led nowhere because the Bulgarian authorities were unwilling to cancel the A1 forms;
3)  both non-compliance with the rules, and an intention to defraud were proved;
4)  the accused were guaranteed the right to a fair trial.

FEB – This ruling gives Belgian social security inspectors greater authority to combat genuine cases of social dumping and fraud. False A1 forms are too easily misused to abuse secondment and undermine the fundamental principles of the single market and fair competition. It is positive that the European Court of Justice reiterated a number of fundamental principles of Community law and thus set things out so clearly.

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