Joined Cases C‑410/21 and C‑661/21

Criminal proceedings

against

FU and Others

(Requests for a preliminary ruling from the Hof van Cassatie)

Judgment of the Court (Second Chamber), 2 March 2023

(Reference for a preliminary ruling – Migrant workers – Social security – Legislation applicable – Regulation (EC) No 987/2009 – Article 5 – A1 certificate – Provisional withdrawal – Binding effect – Certificate fraudulently obtained or relied on – Regulation (EC) No 883/2004 – Article 13(1)(b)(i) – Persons normally pursuing an activity as an employed person in two or more Member States – Applicability of the legislation of the Member State in which the registered office is situated – Concept of ‘registered office’ – Undertaking which has obtained a Community licence for transport under Regulation (EC) No 1071/2009 and Regulation (EC) No 1072/2009 – Effect – Licence fraudulently obtained or relied on)

1. Social security – Migrant workers – Legislation applicable – Workers posted to a Member State other than that in which the employer is established – A1 certificate issued by the competent institution of the Member State of establishment – Probative value for the social security institutions of other Member States and for the courts of those Member States – Provisional suspension, by the issuing institution, of the binding effects of that certificate – Irrelevant – Possibility of disregarding, in the context of criminal proceedings brought in the Member State of the place of work, such a certificate that has been obtained or used fraudulently – Conditions

   (European Parliament and Council Regulations No 883/2004, recital 15 and Arts 11(1) and 76, and No 987/2009, recitals 2 and 6 and Arts 5 and 20)

   (see paragraphs 42, 45, 47-56, 58-65, 67, 68, operative part 1)

2. Social security – Migrant workers – Legislation applicable – Company holding a Community licence for road transport issued by the competent authorities of a Member State – Probative value – Not irrefutable proof of the place of the registered office of that company in that Member State for the purposes of determining the national social security legislation applicable

   (European Parliament and Council Regulations No 883/2004, Art. 13(1)(b)(i), No 987/2009, Art. 14(5a), No 1071/2009, Arts 3(1)(a), 5 and 11(1), and No 1072/2009, Art. 4(1)(a))

   (see paragraphs 72-78, 80-82, operative part 2)

Résumé

FU is the managing director of DRV Intertrans BV, a company established in Belgium. He also set up the company Md Intercargo s. r. o., established in Slovakia. The Slovak competent authority issued A1 certificates ( 1 ) attesting that several employees of Md Intercargo were affiliated to the Slovak social security system.

The checks carried out by the Sociale Inspectie (the Social Security Inspectorate, Belgium) (‘the Belgian Social Security Inspectorate’) brought to light that Md Intercargo had been set up in order to assign a cheap labour force to DRV Intertrans by posting workers. Although it held a Community licence for road transport issued by the Slovak authorities, Md Intercargo had no relevant economic activity in Slovakia. During the criminal proceedings brought against FU and DRV Intertrans for fraud relating to social security contributions, the Belgian Social Security Inspectorate requested the Slovak issuing institution to withdraw retroactively the A1 certificates in question. That institution responded that it was provisionally suspending the binding effects of those certificates until it ruled definitively on that request, after the criminal proceedings were closed.

PN is the managing director of Verbraeken J. en Zonen BV (‘Verbraeken’) a company established in Belgium. It is also a co-owner of UAB Van Daele F., a company established in Lithuania which holds a Community licence for road transport issued by the Lithuanian authorities.

According to an investigation carried out by the Belgian Social Security Inspectorate, PN and Verbraeken used UAB Van Daele F. to employ Lithuanian drivers in Belgium. Criminal proceedings were brought against PN and Verbraeken for fraud related to social security contributions.

By decisions delivered in February 2021 and September 2019, FU and DRV Intertrans, as well as PN and Verbraeken, were found guilty of that fraud.

The referring court, hearing appeals on a point of law in the context of those two sets of proceedings, wonders whether, where a declaration is made by the institution that issued an A1 certificate that its binding effects are provisionally suspended, that certificate continues to be binding on the institutions and courts of the Member States. In addition, it seeks, first, clarification from the Court of Justice as to the possibility of disregarding an A1 certificate in the course of a criminal procedure brought in a Member State in which the work is carried out. Second, it asks the Court as to the evidential value, in order to establish the place of the registered office of a company for the purposes of determining the national social security legislation applicable, of a Community licence for road transport held by it.

The Court replies in the affirmative to the first question and provides clarifications on the two other issues raised by the referring court.

Findings of the Court

In the first place, the Court held that, pursuant to EU law, ( 2 ) an A1 certificate issued by the competent institution of a Member State is binding on the institutions and courts of the Member State in which the work is carried out, including where, following a request for a review and withdrawal sent by the competent institution of the latter Member State to the issuing institution, it has declared that it has provisionally suspended the binding effects of that certificate pending its definitive decision on that request. However, in those circumstances, a court of a Member State in which the work is carried out, seised in the context of criminal proceedings against persons suspected of having fraudulently obtained or used the same A1 certificate, may find that there has been fraud and consequently disregard that certificate as necessary for those criminal proceedings. In order to do so, two conditions must be satisfied: first, a reasonable period of time must have elapsed without the issuing institution having reconsidered the grounds for issuing that certificate and having adopted a decision on the specific evidence submitted by the competent institution in the host Member State, which gave rise to the view that that certificate had been obtained or relied on fraudulently, as the case may be, by cancelling or withdrawing the certificate in question; and, second, the guarantees inherent in the right to a fair trial which must be afforded to those persons must have been respected.

In that regard, the Court states, first of all, that since only the withdrawal and declaration of invalidity of A1 certificates remove the binding effects of those certificates vis-à-vis the institutions and courts of the Member States, ( 3 ) the decision of the issuing institution to provisionally suspend them does not result in the loss of those effects.

Next, the decision of the issuing institution to withdraw an A1 certificate must be taken in the context of the procedure of dialogue and reconciliation between institutions, ( 4 ) where, following a reconsideration of the grounds for the issue of that certificate, that institution considers that its social security system is not applicable to the worker concerned. To accept that the issuing institution may, even temporarily, remove the binding effects of an A1 certificate without having first reconsidered the grounds for its issue or determined which social security system is applicable to the worker concerned would be tantamount to disregarding both the detailed rules for the application of the procedure of dialogue and reconciliation and the purpose of that procedure, and infringe the principle of sincere cooperation on which that procedure is based.

In addition, in such circumstances, the lack of binding effects of the A1 certificate in question would enable the institutions of other Member States to subject the worker concerned to their own social security systems, which would be likely to increase the risk of duplication of those systems, thereby undermining the principle that employed persons are affiliated to a single social security system and the foreseeability of which system is applicable and, therefore, the principle of legal certainty. Furthermore, the potential duplication of those systems could compromise the objective of facilitating the free movement of workers and the freedom to provide services.

Finally, the Court states that, in the present case, although the procedure of dialogue and reconciliation was indeed initiated, the institution that issued the A1 certificates however decided to defer the reconsideration of their validity and the determination of the applicable social security system pending the outcome of the criminal proceedings before the courts of the Member States in which the work is carried out. That institution accordingly did not undertake a reconsideration of the certificates the fraudulent acquisition and use of which was at issue in these criminal proceedings and adopt a position, within a reasonable period, on the evidence in that respect submitted by the competent institution of the host Member State. Consequently, it must be possible for those matters to be relied on in the context of such proceedings, in order to require the court to disregard the certificates at issue.

In the second place, the Court states that, under EU law, ( 5 ) the fact that a company holds a Community licence for road transport issued by the competent authorities of a Member State does not constitute irrefutable proof that the registered office of that company is in that Member State for the purposes of determining the national social security legislation applicable.

On that subject, the Court stated that since the issuing of a Community licence for road transport was subject to a requirement of an ‘effective and stable establishment’, ( 6 ) the criteria for determining the place of establishment of a transport company for the purposes of obtaining such a licence are different from those used to determine its ‘registered office or place of business’. ( 7 ) Whereas the element of connection of the ‘registered office or place of business’ is determined by the place from which an undertaking is in fact managed and organised, the concept of ‘effective and stable establishment’ refers essentially to the place where the undertaking’s core business documents are held and where its equipment, as well as its technical and administrative facilities, are located.

( 1 ) The A1 certificate is issued pursuant to Article 19(2) of Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) No 883/2004 on the coordination of social security systems (OJ 2009 L 284, p. 1), as amended by Regulation No 465/2012, by the institution designated by the competent authority in the Member State whose legislation on social security applies, in order to attest that workers are subject to the legislation of that Member State.

( 2 ) The Court refers to Article 5 of Regulation No 987/2009.

( 3 ) See Article 5(1) of Regulation No 987/2009.

( 4 ) That procedure is provided for in Article 76(6) of Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ 2004 L 166, p. 1), as amended by Regulation (EU) No 465/2012 of the European Parliament and of the Council of 22 May 2012 (OJ 2012 L 149, p.4).

( 5 ) The Court based its decision on Article 13(1)(b)(i) of Regulation (EC) No 883/2004, Article 3(1)(a) of Regulation (EC) No 1071/2009 of the European Parliament and of the Council of 21 October 2009 establishing common rules concerning the conditions to be complied with to pursue the occupation of road transport operator and repealing Council Directive 96/26/EC (OJ 2009 L 300, p.51) and Article (4)(1)(a) of Regulation (EC) No 1072/2009 of the European Parliament and of the Council of 21 October 2009 on common rules for access to the international road haulage market (OJ 2009 L 300, p.72).

( 6 ) Within the meaning of Article 3(1)(a) of Regulation No 1071/2009.

( 7 ) Within the meaning of Article 13(1)(b)(i) of Regulation No 883/2004.