On 2 March 2023, the European Court of Justice has decided in the case DRV Intertrans BV (C‑410/21 and C-661/21) that the binding value of an A1 certificate remains intact even if the issuing authorities temporarily suspend the binding value of the A1 certificate. However, the court reiterates in accordance with previous case law that the binding value of these A1 certificates can be set aside in the case of fraud.
In the cases at hand, two Belgian transport companies had created a legal entity in Slovakia and in Lithuania to carry out national and international transport activities, respectively. Both legal entities held a Community licence for road transport issued by the local authorities.
The employees who physically carried out the activities in multiple Member States held an A1 certificate confirming the applicability of Slovak and Lithuanian social security in the absence of substantial activities in the Member State of residence. In such case, employees are deemed to be subject to the social security regime of the Member State in which the registered office or place of business of the undertaking or employer is situated.
In the absence of any relevant economic activity in Slovakia or any genuine link with Lithuania, the Belgian inspectorate contested the validity of the – supposedly fraudulently obtained – documents and initiated criminal proceedings.
During the legal proceedings in the Slovakian case, the Belgian inspectorate requested the issuing institution to withdraw the A1 certificates of the employees. This request was not made in the Lithuanian case.
The Slovakian authorities stated that it would provisionally withdraw (↔ definitely withdraw) the A1 certificates, thereby suspending the binding value to facilitate local legal proceedings, but that the employees would in the meantime nonetheless remain subject to Slovak social security and that a final assessment would be made after the termination of the pending criminal proceedings.
The Belgian Supreme Court suspended the legal proceedings and asked the European Court of Justice to clarify the binding value of provisionally withdrawn A1 certificates, the impact of fraud on the binding value of an A1 certificate and to interpret the notion of “registered office or place of business of the undertaking or employer”.
In the past, the European Court of Justice has consistently held that an A1 certificate issued by the competent institution binds the institutions of other Member States as long as it has not been withdrawn or declared invalid.
The binding nature of the declaration applies in relation to both the competent social security institutions and the judiciary. This means that:
- the social security authorities of another Member State cannot subject the employees who hold an A1 certificate to its own social security scheme; and
- a court does not have jurisdiction to review the validity of an A1 certificate.
If there is a disagreement, Member States must address the authorities of the issuing State in accordance with the procedure provided for that purpose. If this does not lead to the desired result, they should approach the Administrative Commission.
In the case DRV Intertrans BV (C-410/21 and C-661/21), the European Court of Justice firstly confirmed that the binding value of an A1 certificate is only lost upon definite withdrawal. Hence, the provisional withdrawal cannot affect the binding value of an A1 certificate.
On the other hand, fraudulently obtained A1 certificates can be set aside in accordance with established case law (i.e., Altun C-359/16, Vueling Airlines C-370/17 and C-37/18, Alpenrind C-527/16) by a national court. In this framework, the European Court of Justice decided that the Slovakian authorities, by provisionally withdrawing the A1 certificates in the framework of the reconciliation procedure, did not adopt a position within a reasonable period of time triggering the possibility to set aside the fraudulently obtained A1 certificates. In the absence of any reconciliation procedure in the Lithuanian case, the conditions to set aside the fraudulently obtained A1 certificates are deemed not to be fulfilled.
Lastly, the European Court of Justice decided that the notion of “registered office or place of business of the undertaking or employer”, serving as a connecting factor to determine the applicable social security in the framework of multistate working, cannot be assimilated with “an effective and stable establishment” used in the framework of the regulation on Community road transport licences. Hence, holding a Community licence in a Member State does not automatically mean that the registered office or place of business for social security purposes is also located in that Member State.
The provisional withdrawal does not affect the binding value of an A1 certificate. Although A1 certificates have a far-reaching binding value, these documents can in certain cases be set aside by a national court in case of fraud. In case the issuing authority merely provisionally withdraws the A1 certificate upon a request for reconsideration by another Member State, a national court of that Member State can be entitled to set aside the binding value in the framework of criminal proceedings.