Court of Justice decides: fraudsters can no longer hide behind A1 certificate

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Date:
06 Feb 2018

Today, the European Court of Justice decided in the Altun case (C-359/16) that a judicial authority of a host Member State is not bound by the E101 certificate (i.e.  the present A1 certificate) issued by the competent authorities of the sending state when it establishes that said certificate was fraudulently obtained and the sending state failed to carry out a review of the E101 certificate within a reasonable period of time.

In the case at hand, several Bulgarian companies posted employees to Belgium. Even though the Bulgarian companies had hardly any activities in Bulgaria – one of the posting conditions – the employees were subject to Bulgarian social security and were in the possession of an E101 certificate.

Because the reasoned request addressed to the Bulgarian authorities to repeal the E101 certificates was not adequately treated, the Belgian authorities took legal action to make the employees subject to Belgian social security. A preliminary question was put to the Court of Justice concerning the binding power of a fraudulently obtained E101 certificate.

The Court of Justice recognised the principle of fraus omnia corrumpit as a fundamental EU principle. According to the Court, the determination of fraud requires (i) an objective and (ii) a subjective element:

(i) the posting conditions are in fact not fulfilled, and;

(ii) this is deliberately hidden by the people concerned (e.g., by a misrepresentation of the situation or by withholding relevant information).

If the sending state fails to adequately address the request to reconsider the E101 certificate, the judge of the host state establishing fraud can disregard the certificate. However, the Court underlines that the judge, when establishing fraud, must safeguard the rights of defence of those concerned.      

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In the event that the sending state fails to reconsider the issued A1 certificate, Belgian judges establishing fraud will be entitled to make “posted” employees subject to Belgian social security.