1. FREEDOM OF MOVEMENT FOR PERSONS

Treaty establishing the European Community;

31968 L 0360: Council Directive 68/360/EEC of 15 October 1968 on the abolition of restrictions on movement and residence within the Community for workers of Member States and their families (OJ L 257, 19.10.1968, p. 13), as last amended by:

- 11994 N: Act concerning the conditions of accession and the adjustments to the Treaties — Accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden (OJ C 241, 29.8.1994, p. 21);

31968 R 1612: Council Regulation (EEC) No 1612/68 of 15 October 1968 on freedom of movement for workers within the Community (OJ L 257, 19.10.1968, p. 2), as last amended by:

- 31992 R 2434: Council Regulation (EEC) No 2434/92 of 27.7.1992 (OJ L 245, 26.8.1992, p. 1);

31996 L 0071: Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (OJ L 18, 21.1.1997, p. 1).

1. Article 39 and the first paragraph of Article 49 of the EC Treaty shall fully apply only, in relation to the freedom of movement of workers and the freedom to provide services involving temporary movement of workers as defined in Article 1 of Directive 96/71/EC between Hungary on the one hand, and Belgium, the Czech Republic, Denmark, Germany, Estonia, Greece, Spain, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Austria, Poland, Portugal, Slovenia, Slovakia, Finland, Sweden and the United Kingdom on the other hand, subject to the transitional provisions laid down in paragraphs 2 to 14.

2. By way of derogation from Articles 1 to 6 of Regulation (EEC) No 1612/68 and until the end of the two year period following the date of accession, the present Member States will apply national measures, or those resulting from bilateral agreements, regulating access to their labour markets by Hungarian nationals. The present Member States may continue to apply such measures until the end of the five year period following the date of accession.

Hungarian nationals legally working in a present Member State at the date of accession and admitted to the labour market of that Member State for an uninterrupted period of 12 months or longer will enjoy access to the labour market of that Member State but not to the labour market of other Member States applying national measures.

Hungarian nationals admitted to the labour market of a present Member State following accession for an uninterrupted period of 12 months or longer shall also enjoy the same rights.

The Hungarian nationals mentioned in the second and third subparagraphs above shall cease to enjoy the rights contained in those subparagraphs if they voluntarily leave the labour market of the present Member State in question.

Hungarian nationals legally working in a present Member State at the date of accession, or during a period when national measures are applied, and who were admitted to the labour market of that Member State for a period of less than 12 months shall not enjoy these rights.

3. Before the end of the two year period following the date of accession, the Council shall review the functioning of the transitional provisions laid down in paragraph 2, on the basis of a report from the Commission.

On completion of this review, and no later than at the end of the two year period following the date of accession, the present Member States shall notify the Commission whether they will continue applying national measures or measures resulting from bilateral agreements, or whether they will apply Articles 1 to 6 of Regulation (EEC) No 1612/68 henceforth. In the absence of such notification, Articles 1 to 6 of Regulation (EEC) No 1612/68 shall apply.

4. Upon Hungary's request, one further review may be held. The procedure referred to in paragraph 3 shall apply and shall be completed within six months of receipt of Hungary's request.

5. A Member State maintaining national measures or measures resulting from bilateral agreements at the end of the five year period indicated in paragraph 2 may, in case of serious disturbances of its labour market or threat thereof and after notifying the Commission, continue to apply these measures until the end of the seven year period following the date of accession. In the absence of such notification, Articles 1 to 6 of Regulation (EEC) No 1612/68 shall apply.

6. During the seven year period following the date of accession, those Member States in which, by virtue of paragraphs 3, 4 or 5, Articles 1 to 6 of Regulation (EEC) No 1612/68 apply as regards Hungarian nationals, and which are issuing work permits to nationals of Hungary for monitoring purposes during this period, will do so automatically.

7. Those Member States in which, by virtue of paragraphs 3, 4 or 5, Articles 1 to 6 of Regulation (EEC) No 1612/68 apply as regards Hungarian nationals, may resort to the procedures set out in the subparagraphs below until the end of the seven year period following the date of accession.

When a Member State referred to in the first subparagraph undergoes or foresees disturbances on its labour market which could seriously threaten the standard of living or level of employment in a given region or occupation, that Member State shall inform the Commission and the other Member States thereof and shall supply them with all relevant particulars. On the basis of this information, the Member State may request the Commission to state that the application of Articles 1 to 6 of Regulation (EEC) No 1612/68 be wholly or partially suspended in order to restore to normal the situation in that region or occupation. The Commission shall decide on the suspension and on the duration and scope thereof not later than two weeks after receiving such a request and shall notify the Council of such a decision. Any Member State may, within two weeks from the date of the Commission's Decision, request the Council to annul or amend the Decision. The Council shall act on such a request within two weeks, by qualified majority.

A Member State referred to in the first subparagraph may, in urgent and exceptional cases, suspend the application of Articles 1 to 6 of Regulation (EEC) No 1612/68, followed by a reasoned ex-post notification to the Commission.

8. As long as the application of Articles 1 to 6 of Regulation (EEC) No 1612/68 is suspended by virtue of paragraphs 2 to 5 and 7 above, Article 11 of the Regulation shall apply in Hungary with regard to nationals of the present Member States, and in the present Member States with regard to Hungarian nationals under the following conditions:

- the members of a worker's family referred to in Article 10(1)(a) of the Regulation, legally residing with the worker in the territory of a Member State at the date of accession, shall have, upon accession, immediate access to the labour market of that Member State. This does not apply to family members of a worker legally admitted to the labour market of that Member State for a period of less than 12 months;

- the members of a worker's family referred to in Article 10(1)(a) of the Regulation, legally residing with the worker in the territory of a Member State from a date later than the date of accession, but during the period of application of the transitional provisions laid down above, shall have access to the labour market of the Member State concerned once they have been resident in the Member State concerned for at least eighteen months or from the third year following the date of accession, whichever is the earlier.

These provisions shall be without prejudice to more favourable measures whether national or resulting from bilateral agreements.

9. Insofar as certain provisions of Directive 68/360/EEC may not be dissociated from those of Regulation (EEC) No 1612/68 whose application is deferred pursuant to paragraphs 2 to 5 and 7 and 8, Hungary and the present Member States may derogate from those provisions to the extent necessary for the application of paragraphs 2 to 5 and 7 and 8.

10. Whenever national measures, or those resulting from bilateral agreements, are applied by the present Member States by virtue of the transitional provisions laid down above, Hungary may maintain in force equivalent measures with regard to the nationals of the Member State or States in question.

11. If the application of Articles 1 to 6 of Regulation (EEC) No 1612/68 is suspended by any of the present Member States, Hungary may resort to the procedures laid down in paragraph 7 with respect to the Czech Republic, Estonia, Latvia, Lithuania, Poland, Slovenia or Slovakia. During any such period work permits issued by Hungary for monitoring purposes to nationals of the Czech Republic, Estonia, Latvia, Lithuania, Poland, Slovenia or Slovakia shall be issued automatically.

12. Any present Member State applying national measures in accordance with paragraphs 2 to 5 and 7 to 9, may introduce, under national law, greater freedom of movement than that existing at the date of accession, including full labour market access. From the third year following the date of accession, any present Member State applying national measures may at any time decide to apply Articles 1 to 6 of Regulation (EEC) No 1612/68 instead. The Commission shall be informed of any such decision.

13. In order to address serious disturbances or the threat thereof in specific sensitive service sectors on their labour markets, which could arise in certain regions from the transnational provision of services, as defined in Article 1 of Directive 96/71/EC, and as long as they apply, by virtue of the transitional provisions laid down above, national measures or those resulting from bilateral agreements to the free movement of Hungarian workers, Germany and Austria may, after notifying the Commission, derogate from the first paragraph of Article 49 of the EC Treaty with a view to limit in the context of the provision of services by companies established in Hungary, the temporary movement of workers whose right to take up work in Germany and Austria is subject to national measures.

The list of service sectors which may be covered by this derogation is as follows:

— in Germany:

Sector | NACE [1], code, unless otherwise specified |

Construction, including related branches | 45.1 to 4; Activities listed in the Annex to Directive 96/71/EC |

Industrial cleaning | 74.70 Industrial cleaning |

Other Services | 74.87 Only activities of interior decorators |

— in Austria:

Sector | NACE [1], code, unless otherwisespecified |

Horticultural service activities | 01.41 |

Cutting, shaping and finishing of stone | 26.7 |

Manufacture of metal structures and parts of structures | 28.11 |

Construction, including related branches | 45.1 to 4; Activities listed in the Annex to Directive 96/71/EC |

Security activities | 74.60 |

Industrial cleaning | 74.70 |

Home nursing | 85.14 |

Social work activities without accommodation | 85.32 |

To the extent that Germany or Austria derogate from the first paragraph of Article 49 of the EC Treaty in accordance with the preceding subparagraphs, Hungary may, after notifying the Commission, take equivalent measures.

The effect of the application of this paragraph shall not result in conditions for the temporary movement of workers in the context of the transnational provision of services between Germany or Austria and Hungary which are more restrictive than those prevailing on the date of signature of the Treaty of Accession.

14. The effect of the application of paragraphs 2 to 5 and 7 to 12 shall not result in conditions for access of Hungarian nationals to the labour markets of the present Member States which are more restrictive than those prevailing on the date of signature of the Treaty of Accession.

Notwithstanding the application of the provisions laid down in paragraphs 1 to 13, the present Member States shall, during any period when national measures or those resulting from bilateral agreements are applied, give preference to workers who are nationals of the Member States over workers who are nationals of third countries as regards access to their labour market.

Hungarian migrant workers and their families legally resident and working in another Member State or migrant workers from other Member States and their families legally resident and working in Hungary shall not be treated in a more restrictive way than those from third countries resident and working in that Member State or Hungary respectively. Furthermore, in application of the principle of Community preference, migrant workers from third countries resident and working in Hungary shall not be treated more favourably than nationals of Hungary.

[1] NACE: see 31990 R 3037: Council Regulation (EEC) No 3037/90 of 9 October 1990 on the statistical classification of economic activities in the European Community (OJ L 293, 24.10.1990, p. 1), as last amended by32002 R 0029: Commission Regulation (EC) No 29/2002 of 19.12.2001 (OJ L 6, 10.1.2002, p. 3).

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