National approaches of EU Member States in concluding bilateral social security agreements with third countries
| Author | Bernard Spiegel |
| DOI | 10.1177/1388262718780747 |
| Published date | 01 June 2018 |
| Date | 01 June 2018 |
| Subject Matter | Articles |
EJSS
Article
European Journal of Social Security
2018, Vol. 20(2) 148–161
National approaches of EU
ª The Author(s) 2018
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DOI: 10.1177/1388262718780747
bilateral social security
journals.sagepub.com/home/ejs
agreements with third
countries: The case of Austria
Bernard Spiegel
Federal Ministry of Labour, Social Affairs, Health and Consumer Protection, Vienna
Abstract
For EU Member States like Austria, the EU Regulations on the coordination of social security
schemes are the focus of academic and political attention. They deal with many cases and are
usually very complex. They are supervised by the European Commission and the CJEU. Compared
to these EU rules, bilateral agreements with third countries are treated as step-children. They do
not get the academic and political attention they deserve, taking into account their importance in
practice. They have common features compared to the EU rules, but there are also remarkable
differences in the texts and their interpretation. The differences sometimes lead to practical
problems of application and interpretation in the EU Member States. Based on Austrian experi-
ences, all these aspects are elaborated in this article. Enhanced cooperation and exchange of
information between the EU Member States in the future could help to improve the negotiating
position of these countries and also guarantee greater esteem for the bilateral agreements.
Keywords
Social security, international agreements, Regulation (EC) No. 883/2004, equal treatment,
assimilation of facts, export of benefits, applicable legislation, sickness, pensions, data protection
Introduction
Like the European Union’s rules on social security coordination, bilateral social security agree-
ments concluded between Member States and third countries seek to avoid conflicts of laws and
safeguard acquired rights. There are, however, also significant differences. Bilateral agreements do
Corresponding author:
Bernard Spiegel, Head of Division, Federal Ministry of Labour, Social Affairs, Health and Consumer Protection, Vienna.
E-mail: bernhard.spiegel@sozialministerium.at
Spiegel
149
not have to be in conformity with the overriding Treaty provisions on the free movement of
workers, and are not subject to supervision by supranational bodies such as the European Com-
mission and the EU Court of Justice (CJEU). In principle, only the national courts are competent to
apply and interpret bilateral social security agreements. Further, States are free to conclude bilat-
eral agreements in any way they deem appropriate and cannot be forced to do so against their will.
Thus, (Member) States have more control over bilateral agreements than over EU rules. Political
attention and academic interest usually focus on the EU rules and not the bilateral agreements.
Good examples are vividly debated political topics as ‘social tourism’ or ‘social dumping’, which
are seen as a (possible) consequence of EU law, but never of the bilateral agreements.1
This article will compare the bilateral agreements on social security concluded by Austria with
the EU rules on the coordination of social security schemes as contained in Regulation 883/2004.2
The aim is not to systematically and comprehensively analyse the structure of each of the Austrian
bilateral agreements and compare each provision with the rules contained in Regulation 883/2004.
Rather, specific issues have been selected to highlight the most interesting aspects.
Austria has a long tradition of concluding bilateral social security agreements with third coun-
tries.3 Today4 agreements with eight European countries5 and ten overseas countries,6 are in force
or have, at least, been signed.7 Thus, the Austrian experiences in this field extend far beyond the
application of the EU rules. As will be demonstrated, the Austrian way of concluding bilateral
agreements does not necessarily or entirely correspond to the approach other (Member) States have
chosen.8
Drivers behind social security agreements
States’ motives for concluding bilateral agreements on social security differ according to when and
under what circumstances the agreements are concluded. Important factors in this regard are the
national characteristics of the social security system, the number of persons immigrating from or
1. One of the reasons for this discussion at European level is the relationship between the EU coordination rules on social
security and the EU rules on residence – the CJEU has ruled that the equal treatment provision of the latter have priority
of that one of the first – case 140/12, Brey, ECLI: EU: C:2013:565.
2. Regulation (EC) No 883/2004 on the coordination of social security systems (OJ 2004 L 166:1).
3. See the Treaty of St. Germain of 10 September 1919, which (in its Art. 275) already dealt with the social insurance
burdens of the Austrian-Hungarian Monarchy. Based on that Article Austria concluded bilateral treaties with the suc-
cessor states of the monarchy, such as Yugoslavia (29 March 1924 -Austrian Federal Law Gazette 116/1931, p.551).
Other social security agreements were concluded soon thereafter. See e.g. the first social security agreement with
Yugoslavia of 21 July 1931 (Austrian Federal Law Gazette 13/1934, p. 59).
4. The number of today’s agreement does not reflect all the agreements concluded in the past, as those with countries to
which Reg. 883/2004 applies (27 other EU Member States, the EEA States Iceland, Liechtenstein and Norway as well as
with Switzerland) where superseded by the said Regulation.
5. Namely, Albania, Bosnia and Herzegovina, FYROM, Kosovo, Moldova, Montenegro, Serbia and Turkey. Social
security coordination with other EU Member States, the EEA countries and Switzerland are governed by Regulation
883/2004, the EEA Agreement and the EU-Swiss agreement on free movement of persons, respectively.
6. Australia, Chile, India, Israel, Canada (and a specific ‘understanding’ with Que´bec), Republic of Korea, Philippines,
Tunisia, USA and Uruguay. New agreements are elaborated with Brazil and China. The agreement with Japan has been
in the development stage for years, but without great success.
7. For further details see Spiegel (2012).
8. See further Spiegel (2010).
150
European Journal of Social Security 20(2)
emigrating to a specific country, and economic or historic developments such as the dissolution of
countries.
In the 1960s, the Austrian government sought to attract labour to Austria. Austria, therefore
concluded social security agreements which contained provisions on the protection of family
members who remained in the country of origin and the granting of benefits when migrant workers
returned there. Many of these agreements were concluded in conjunction with separate agreements
to attract labour from these countries.9 Starting in the 1980s Austria concluded social security
agreement to protect Austrians who emigrated overseas (e.g. the agreement with the USA), which
aimed to protect pension rights. A third, and the most recent, reason for concluding bilateral
agreements, involved the problems faced by Austrian enterprises in third countries as regards the
obligation to pay quite high social security contributions for employees posted to these countries in
addition to the contributions that continued to be payable in Austria.10 Thus, these new agreements
(e.g. the one with India) aim to avoid the double burden of contributions and to safeguard the
competitiveness of Austrian enterprises in the local markets.
Other drivers include the political aim of helping a country to develop its administrative
capacity and get accustomed to the principles of social security coordination in Europe although
this country could still be far from membership in the EU (e.g. the agreement with Moldova) or
settling past issues like the apportionment of insurance burdens after the separation of countries
that had previously had a common social security system.11
Main differences between the bilateral agreements concluded by
Austria and Regulation 883/2004
Material scope
A first striking difference is that bilateral agreements do not enumerate benefits related to specific
risks (e.g. invalidity, old-age, etc.)12 but, rather, refer to the specific legislation of the two con-
tracting countries (in relation to Austria, e.g. ‘pension insurance with the exception of the insur-
ance for notaries’).13 Thus, in the case of bilateral agreements, the states involved can define and
limit their scope and avoid the rules agreed upon being applicable to laws or to benefits they never
intended to include. Nevertheless, negotiators have to be careful. The list of laws and benefits
covered by bilateral agreements has to be examined in detail to safeguard a synchronised material
9. E.g. in relation to Turkey the agreement on the recruitment of Turkish workers and their employment in Austria
(Austrian Federal Law Gazette 164/1964, p.1061), which has to be seen as the initiator for the Austrian-Turkish
agreement on social security (Austrian Federal Law Gazette 337/1969, p. 1788).
10. Under national Austrian law (§ 3(2)(d) of the ‘Allgemeines Sozialversicherungsgesetz’ (ASVG) General Social
Insurance Law) employees posted by their Austrian employer to another country remain covered by Austrian legis-
lation for five years and the employer remains liable to pay the Austrian social security contributions.
11. For Austria this applies e.g. to the Second Austrian-German agreement on...
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