Proposal for a Council Regulation (EC) amending Regulation (EEC) No 1408/71 as regards its extension to nationals of third countries
Date: 1997-11-12
Institutions: European Commission
Subjects: equal treatment, foreign national, free movement of workers, migrant worker, social security

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.11.1997 
COM(97) 561  final 

97/0320 (CNS) 

Proposal for a 
COUNCIL REGULATION (EC) 
amending Regulation (EEC) No 1408/71 as regards its extension 
to nationals of third countries 

(presented by the Commission) 

EXPLANATORY MEMORANDUM 

I. 

GENERAL FRAMEWORK 

This proposal seeks to extend Community coordination  of social security schemes, as 
laid down by Regulation (EEC) No  1408/711, to employed persons and  self-employed 
persons who  are insured  in a Member  State  and who  are not  Community nationals. 
The proposal is being put forward by the Commission in the light of the considerations 
set out below. 

1. 

Moving  towards  equal  treatment  for  nationals  of  third  countries  legally  resident  in 
the Community 

The Commission has for many years been endeavouring to improve the legal status of 
nationals  of third  countries  legally resident  in the  Community.  The  White Paper  on 
European  social  policy2  underlined  the  importance  of  this  objective,  and  the 
Commission's  medium-term  social  action  programme  (1995-97)  also  highlights 
this issue. 

Moreover, the Commission adopted, on 30 July 19973, a draft  Convention on rules for 
the admission of third-country nationals to the Member States. In line with its strategy 
of  securing  equal  treatment  for  legally  resident  nationals  of  third  countries,  the 
Commission's  proposal  is  aimed  at  introducing  a  mechanism  whereby  nationals  of 
third countries  resident  over  a  long  period  are  recognized  as  long-term  residents. 
Under  the  terms  of the  Commission's  proposal,  such  persons  should  enjoy  specific 
rights,  on an equal footing with Community citizens, both in the Member State where 
they are recognized as long-term residents and in the other Member States. 

The  stance 
Social Committee5 is similar to that of the Commission. 

the  European  Parliament4  and 

taken  by 

the  Economic  and 

1  Regulation  (EEC)  No  1408/71  on  the  application  of  social  security  schemes  to  employed  persons,  to 
self-employed  persons  and  to  members  of  their  families  moving  within  the  Community,  updated  by 
Council  Regulation  (EC)  No  118/97  of  2 December  1996  (OJ  L  28,  30.1.1997),  last  amended  by 
Council Regulation  (EC)  No  1290/97  of  27 June  1997  (OJ  L  176,  4 7.1997).  The  legal  basis  for  this 
Regulation comprises Article 51 and Article 235 of the EC Treaty. 

2  COM(94) 333 of 27 July 1994. 
3  COM(97) 387 of 30 July 1997. 
4  See  for  example:  Resolution  of  14 June  1990  on  migrant  workers  from  third  countries  (OJ  C 175, 
16.6.1990,  p. 180);  Resolution  of  18 November  1992  on  European  immigration  policy,  point  30 
(OJC337,  21 12.1992,  p. 94);  Resolution  of  15 July  1993  on  European  immigration  policy,  point  13 
(OJC255,  20.9.1993,  p. 184);  and,  more  recently,  its  Resolution  of  30 January  1997  on  racism, 
xenophobia  and  anti-Semitism  and  on  the  European  Year  against  Racism  (1997),  point  17 (OJ  C 55, 
24.2.1997). 

5  See for  example: Opinion  of  26 September  1991 on the  status  of migrant  workers from  third  countries 

(OJC339, 31.12.1991, p. 82). 

The Council  and the Member  States  have  also  recognized  "the  great  importance  of 
implementing,  in  the  field  of  social  policy,  policies  based  on  the  principles  of 
non-discrimination  and  equal  opportunities  at  Community  and  Member  State  level, 
within the framework of their respective powers, as a contribution to the common  fight 
against racism and xenophobia"6. 

Anchoring  the  principle  of  equal  treatment  for  nationals  of  third  countries  in  both 
national and Community law forms part  of an overall  strategy to  combat  racism and 
xenophobia within the Community. Mindful of the workings of the internal market and 
the  pressing  need  to  combat  racism  and  xenophobia,  the  Advisory  Committee  on 
Racism  and  Xenophobia,  set  up  by  the  Corfu  European  Council  in  July  1994,  is 
another  keen  advocate  of  equal rights being  granted  to  nationals  of  third  countries 
whose situation is regularized7. 

These  calls  for  nationals  of third  countries  to  be given  equal rights take  on  special 
significance  in  1997, the European Year  against Racism. European  social legislation, 
and in particular Regulation (EEC) No  1408/71 on the coordination of social security 
schemes, which does not at present cover nationals of third countries, is at the heart of 
the  matter.  The  lack  of  social  protection  afforded  by  the  Regulation  could  put  the 
persons concerned at a disadvantage. 

2. 

The purpose of Community coordination 

Based  on  Article  51  of  the  EC  Treaty,  Community  legislation  for  coordinating  the 
Member  States'  social  security  schemes  is  designed  to  ensure, firstly, that  persons 
moving within the  Community  do not  lose their  social  security rights and,  secondly, 
that  they  do  not  become  doubly  liable  for  contributions.  Generally  speaking,  the 
Member  States'  social  security  systems  do  not  take  into  consideration  the  specific 
situation  of  persons  working,  residing  or  staying  in  another  Member  State. 
Consequently,  the  wide  diversity  of  national  systems,  with  only  national  legislation 
being  applied  to  transnational  situations,  could  seriously  hamper  people's  freedom 
of movement. 

The  underlying  principles  of  Community  legislation  on  coordination  are:  equal 
treatment  for  Community  nationals;  determination  of  the  legislation  applicable  in 
transnational  situations;  export  of benefits;  and  aggregation  of  periods  completed in 
more than one Member State. 

Coordination is purely "internal" and relates exclusively to the Member  States'  social 
security  schemes.  It  has nothing to  do with  the  systems  of  countries  which  are not 
members  of the  Community  or  the European  Economic  Area,  or with  events which 
occur under their legislation. There is no "external" coordination linking the systems of 
Member States to those of one or more other countries whereby it might, for example, 
be  possible  to  take  account  of  periods  completed  under  the  legislation  of 

6  Point 3 of the Resolution of the Council and the representatives of the Governments of the Member Stales, 
meeting with the Council, of 5 October  1995 on the fight against racism and xenophobia  in the fields of 
employment and social affairs  (OJ C 296, 10.11.1995). 

7  Advisory Committee on Racism and Xenophobia, Final report (April  1995), p. 43. 

third countries, to export benefits to such countries or to equate periods of residence in 
a third country with periods of residence in the Community. 

Furthermore,  coordination  is  not  aimed  at  harmonizing  the  Member  States'  social 
security  schemes,  nor  does  it  impinge on the  differences  between  them,  whether  in 
terms  of  substance  or  procedurally.  The Member  States retain  complete  freedom  to 
decide who is insured, what benefits are provided and under what conditions, and what 
contributions  musjt  be  paid,  subject 
the  principle  of 
non-discrimination on grounds of nationality. 

to  compliance  with 

Persons covered by Regulation (EEC) No 1408/71 

Regulation  (EEC)  No  1408/71  covers  employed  or  self-employed  persons  who  are 
Community nationals  and  who  are or  have been  subject  to  the  legislation  of  one or 
more Member States. However, the Regulation also protects the family members and 
survivors of such persons, whatever their nationality,  and applies also to  Community 
nationals who are survivors of nationals of third countries. The nationality requirement 
is also set aside in respect of refugees  or stateless persons residing in the territory of a 
Member State. Finally, under the EEA Agreement, the Regulation applies to nationals 
of the EEA member countries. 

In reality,  the  protection  afforded  by Regulation  (EEC) No  1408/71  extends  to  any 
Community worker insured under a social security scheme who, when moving within 
the Community, encounters difficulties  in relation to social security. For the purpose of 
applying the Regulation, it is not necessary for the person concerned to have exercised 
his or her right to  freedom  of movement  as a worker (pursuant  to  Article 48  of the 
EC Treaty).  The  person  concerned  needs  only  to  move  within  the  Community,  for 
whatever  reason8.  Thus,  the  Regulation  is  applicable  to  a  pensioner  from  one 
Member State who goes to live in another Member State without having worked there. 

Coordination rules applicable to nationals of third  countries excluded  from  the scope 
of Regulation (EEC) No 1408/71 

Most of the  13 million nationals of third  countries residing legally in Member  States 
are  not  protected  by  the  coordination  rules  of  Regulation  (EEC)  No  1408/71.  As 
matters stand, their situation with regard to "internal" coordination differs  according to 
their nationality and the Member State concerned. In this connection, a distinction can 
be made between various categories: 

See  in  particular:  Judgment  of  19  March  1964,  Unger, Case  75/63,  ECR  177;  Judgment  of 
11 March 1965, Bertlwlet, Case  31/65, ECR 81; Judgment  of  12 November  1969,  Entr'aide  Médicale, 
ECR 1969, 405; Judgment of 16 March  1978, Pierik, Case 117/77, ECR 825. 

4 

nationals  of  third  countries  already covered by Regulation  (EEC)  No  1408/71, 
i.e. stateless persons and refugees; 

- 

nationals of third countries partially covered by Regulation (EEC) No 1408/71  as 
members of the family of a Community national (derived rights); 

nationals  of  third  countries  covered  by  agreements  concluded  between  the 
Community  and third  countries  containing  provisions  relating to  social  security: 
see  Association  Agreement  with  Turkey  (more  particularly,  the  Association 
Council's Decision 3/80 of 19 September  1980) and cooperation agreements with 
Morocco, Tunisia and Algeria; 

nationals  of third  countries  covered by bilateral agreements  concluded  between 
two or more Member States (more often than not, such agreements do not touch 
on  all  the  areas  of  social  security  or  offer  less  complete  protection  than 
Regulation (EEC) No 1408/71); 

nationals of third countries covered by the Council of Europe's European Interim 
Agreement of 11  December 1953 or by other multilateral agreements; 

nationals  of  third  countries  covered by  bilateral social  security  agreements 
concluded between a Member State and a third country (such agreements provide 
for  "external"  coordination  but  generally  take  account  of  "internal"  situations, 
particularly with frequent references to the principle of equal treatment); 

nationals  of third  countries who do not  fit  into  any of the  above  categories and 
therefore  do not benefit from any protection in relation  to social security when 
they move within the Community, not even qualifying for equal treatment. 

The muddied  legal  situation  resulting from  the multiplicity of protection  levels is not 
only harmful to nationals of third countries but also makes it extremely difficult  for the 
Member States'  social security bodies to determine their specific rights and generates 
sizeable  administrative  costs.  The  confusion  caused  by the  multitude  of  instruments 
applicable to nationals of third  countries is exacerbated  by the differences  in case-law 
as regards the interpretation of such instruments by the national courts. 

5. 

Can the exclusion of nationals of third countries still be justified? 

Increasingly  strong  objections  are being  voiced  about  the  exclusion  of  nationals  of 
third countries from the Community coordination system, not only from the viewpoint 
of adequate  social protection  but  also in the light  of the resultant  administrative and 
legal complications. 

There seems to be no reason for not including nationals of third countries who already 
benefit  from  Community  law,  namely  workers  from  third  countries  who  are  sent 
abroad by a Community undertaking for the purpose of providing  services9. Without 
prejudice to the rights of those providing services, the inclusion of posted workers in 
Regulation (EEC) No  1408/71 avoids potentially problematic conflicts in coordination 
of the rules relating to  social security, such as double levying of contributions, as the 
Court has pointed out in the past10. The double contribution requirement on the part of 
employers may, moreover, constitute an obstacle to the freedom to provide services. 

The report presented on  18 March  1997 by the High-level Group on Free Movement 
of Persons, chaired by Mrs Simone Veil, drew attention to the problems caused by the 
exclusion  of  nationals  of  third  countries,  not  only  from  the  point  of  view  of 
those  concerned  but  also  in  terms  of  management  of  social  security  schemes.  The 
High-level  Group  advocates that  all or part  of the Community coordination  rules be 
extended  to  nationals  of  third  countries  who  are  resident  and  insured  in  a 
Member State. 

Moreover, the case-law of the European Court of Human Rights makes it increasingly 
difficult  to  justify  the  exclusion  of  nationals  of  third  countries.  In  its judgment  in 
Case Gaygusuz v Austria of 16 September 1996, the Court held that the prohibition of 
discrimination on grounds of nationality applied also to social security rights. In so far 
as the  human rights guaranteed  by the  European  Convention  on  Human  Rights  are 
recognized  as  general  principles  of  Community  law,  the  exclusion  of  nationals  of 
third countries  from  the  scope  of  Regulation  (EEC)  No  1408/71  no  longer  seems 
compatible with these principles. 

The above judgment  is especially  significant  in the context  of the European  Union's 
commitment  to  respect  the  fundamental  rights  guaranteed,  in  particular,  by  the 
European  Convention  on  Human  Rights11  and  in  the  light  of  the  efforts  to  give 
nationals of third countries equal treatment (cf.  section 1). 

6.  What  would  be  the  consequences  of  exending  Regulation  (EEC)  No  1408/71  to 

nationals of third countries? 

The  Community  legislation  for  coordinating  the  Member  States'  social  security 
schemes is designed to ensure, firstly, that persons moving within the Community do 
not  lose  their  social  security  rights  and,  secondly,  that  they  do  not  become 
doubly  liable  for  contributions.  Therefore  the  first  objective  of  the  extension  of 
Regulation  (EEC) No  1408/71 to  nationals of third  countries is to  ensure that when 
they are covered by a social security scheme of a Member State they do not lose  rights 
under  this  scheme  simply  because  they  move between  Member  States  (e.g.  loss of 
coverage for  health care, loss of contribution records) and to ensure that they do not 
become doubly liable for contributions. 

Judgment of 9 August 1994, Vander Elst, Case C-43/93, ECR I - 3803. 

9 
10  Judgment of 3 February  1982, Seco andDesquenne & Giral, Cases 62 and 63/81, ECR 223. 
1 1  See, in this connection, Article F(2) of the Treaty on European Union. 

6 

The extension of Regulation (EEC) No  1408/71 to nationals of third countries would 
have a limited effect  as regards entitlement to  social security, having to do only with 
"internal" coordinating provisions aimed mainly at: 

aggregating  periods  of  insurance,  employment  and  residence  completed within 
the Community; 

exporting old-age, invalidity and survivor's benefits within the Community; 

into  consideration,  for 

taking 
unemployment benefits, family members residing within the Community; 

the  calculation  of  family  allowances  or 

providing social protection for workers residing in one Member State but working 
in another (e.g. frontier workers). 

The extension  would  not  in  any way oblige  the  Member  States  to  take  account  of 
non-Community  situations in terms of acquiring  entitlement  to,  calculating  or paying 
benefits  (residence  in  a  third  country  or  periods  completed  under  non-Community 
legislation).  External  co-ordination  would  continue  to  be  governed  by  bilateral  or 
multilateral social security agreements concluded with third countries either directly by 
the Member States or by the Community and the Member States. 

Moreover, the application of Regulation (EEC) No 1408/71 on its own cannot give the 
persons concerned  any entitlement to enter,  stay in or work in a Member  State, this 
being, as before, a matter for cooperation in the field of justice and home affairs. Even 
if they were  covered by Regulation  (EEC) No  1408/71,  it  would  not  give them the 
right  to move freely within the Community. 

The  application  of  Regulation  (EEC)  No  1408/71  is  entirely  independent  of 
considerations about the legal situation of the person concerned as regards entitlement 
to stay in or enter the territory. The terms "residence" and "stay" within the meaning of 
Article  1 of the Regulation  and the case-law  of the  Court  of Justice12  cover  factual 
concepts focusing on "duration and continuity". 

Extension  of the Regulation  to  nationals  of third  countries would  therefore  have no 
effect  on their  legal  situation  as to  movement  within  the  Community,  including  the 
performance of economic activities indissolubly linked to such movement. 

12  See, in this connection, judgment of 8 July  1992? Knock,  Case C-102/91, ECR  1-4341. 

7 

7. 

The advantages of wholesale extension of Regulation  (EEC) No  1408/71 to nationals 
of third countries 

Not  only  the  persons  concerned  but  also  national  or  Community  institutions  and 
employers  have a vested  interest  in simplifying  the  current  rules,  with  a  consequent 
appreciable reduction in administrative costs13, by reducing the number of instruments 
governing internal coordination in respect of a single category of persons - nationals of 
third  countries.  Wholesale  extension  would  also  make 
the  provisions  of 
Regulation (EEC)  No  574/72  of  21 March 1972  laying  down  the  procedure  for 
implementing  Regulation  (EEC)  No  1408/71  applicable  to  such  persons.  Partial 
extension of the coordination rules would merely increase the administrative  confusion 
and  heighten  discrimination  in  terms  of  legal  status,  which  would  scarcely  be 
compatible with the principle of equal treatment based on respect for human rights and 
the  fight  against  racism.  Accordingly,  in  the  Commission's  opinion,  the  most 
satisfactory  solution  lies  in  laying  down  coordination  rules  for  the  benefit  of  such 
persons by means of a single Community instrument. 

Wholesale  extension  of  the  Regulation  to  nationals  of  third  countries  will  help  to 
reduce administrative costs appreciably; moreover,  the resultant financial implications 
should  be  slight,  given  that  such  persons  are  already  affiliated  to  a  social  security 
scheme in a Member State and may therefore already enjoy certain advantages, such as 
application  of  the  principle  of  equal  treatment  and  of  the  provisions  of  bilateral  or 
multilateral agreements. 

A further  point to note is that nationals of third countries are involved, in the same way 
as Community nationals, by means of contributions paid and taxation, in the funding of 
the Member  States'  social security systems and, hence, in the financial implications of 
Community coordination. 

8.  What is the legal basis for extending the Regulation to nationals of third countries? 

The Community's  power  to  extend  coordination  to  nationals  of third  countries may 
derive  from  Articles  51  and  235  of  the  EC  Treaty,  on  which  Regulation  (EEC) 
No 1408/71 is based. 

Regulation (EEC) No  1408/71 is not geared just to the free movement of workers but 
also  constitutes  an  instrument  of  social  protection.  For  the  purpose  of  applying the 
Regulation, the crucial element is not exercise of the right to freedom  of movement but 
the  fact  that  the  person  concerned  is  insured  under  a  social  security  scheme.  The 
purpose is to maintain social protection for persons moving within the Community for 
whatever reason. In line with the task devolving on the Community under Article 2 of 
the EC Treaty, the aim is to provide a high level of social protection. 

13  For example, the national  institutions cannot at the moment use E-forms  issued under Regulation (EEC) 

No 1408/71 to transmit necessary information  to institutions in other Member Stales. 

8 

Consequently,  Regulation  (EEC)  No  1408/71  contains  a  number  of  provisions 
applicable  to  situations  where  the  person  concerned  has  not  exercised  the  right  to 
freedom of movement  for  workers, but where there is a social  security problem with a 
cross-border  dimension.  For  instance,  the  Regulation  provides  for  the  export  of 
benefits  to  a  Member  State  in  which  the  person  concerned  has  never  worked 
(Article  10), it enables persons staying temporarily in another Member  State to  receive 
health  care  (Article  22),  and  it  ensures  entitlement  to  family  benefits  in  respect  of 
family members residing in another Member State (Article 73). 

It  must  also  be  borne  in mind  that  the  first  coordinating  regulation,  Regulation  No 3, 
was adopted  in  1958 on the basis of Article 51 of the EC Treaty,  nine years before  the 
entry into force,  in  1968, of the right to freedom of movement for workers. 

The  Council,  in  adopting  certain  provisions  of  Regulation  (EEC)  No  1408/71 
applicable to persons who are not migrant workers within the meaning of Article 48 of 
the  EC  Treaty,  and  the  Court  of  Justice,  which  applies  the  Regulation  to  the  same 
category  of persons14,  appear to recognize that  Article  51 of the EC Treaty  allows the 
Community  to  coordinate  national  social  security  schemes  for  all  workers  insured 
under  one of those  schemes,  even if they  are not  migrant  workers  within  the  meaning 
of Article 48 of the EC Treaty. 

Moreover,  the  legal  basis  of  the  Regulation  was  extended  to  Article  235  when  its 
scope  was  enlarged  to  cover  self-employed  persons15.  In  so  far  as  Article  51  of  the 
EC Treaty  does  not  explicitly  provide  for  the  possibility  of extending  coordination  to 
nationals  of third  countries,  Article 235 could  be used  as an additional  legal basis, the 
more so because the objective  is to attain  a high level of social protection  (Article 2 of 
the EC Treaty). 

II. 

COMMENTS ON THE ARTICLES 

Article 1 

Amendment  of Regulation (EEC) No  1408/71 

1- 

Amendment of Article 1 

Given that  Article 2 would  not  contain  any reference  to the nationality  of employed  or 
self-employed  persons, it would be advisable also to remove the definition  of the terms 
"refugee"  and "stateless person" contained in Article  1(d) and (e). 

14  See  the  judgments  referred  to  in  footnote  8  and  the  judgment  of  3  May  1990,  Kits  van  Heiningen, 

Case C-2/89, ECR I - 1755. 

15  By Regulation  (EEC) No  1390/81 of  12 May  1981, OJ L  143,  29.5.1981. 

2. 

Amendment of Article 2 

This proposal seeks to extend Regulation (EEC) No  1408/71 to all employed persons 
and  self-employed  persons  and  members  of  their  families,  irrespective  of  their 
nationality (Community or other). References to the nationality of those concerned and 
to  special  categories  of  persons  other  than  Community  nationals  (stateless  persons, 
refugees,  survivors of nationals of third countries) should be deleted. 

It  is therefore  advisable to  amend the first paragraph  of Article  2  and  to  delete the 
second paragraph. 

In this context,  it  should be noted  that  employed  persons and  self-employed  persons 
are covered by Regulation (EEC) No 1408/71 only in so far as they are legally insured 
under a social security scheme of a Member State. 

3. 

Amendment of Article 22a 

In the light of extension of the scope of Regulation (EEC) No  1408/71 to nationals of 
third  countries,  it  is no longer  appropriate  to  limit  the  application  of  Article  22a  to 
Member State nationals. 

4. 

Insertion of a new Article 95c: transitional measures 

This Article contains transitional  provisions  designed  to  protect  the persons targeted 
by the  proposal  so that  they do not  lose rights  as a result  of the  entry  into force  of 
the Regulation. 

HI. 

JUSTIFICATION FOR THE PROPOSED REGULATION FROM THE POINT 
OF VIEW OF SUBSIDIARITY 

This  proposal  for  a  Council  Regulation  satisfies  the  two  criteria  underpinning  the 
principle of subsidiarity, namely necessity and proportionality as required by Article 3b 
of the Treaty on European Union. 

On the one hand,  Article  51 constitutes  a legal basis whereby  the  Council  may take 
measures  in  relation  to  transnational  social  security.  On  the  other  hand,  a  binding 
legislative  act,  in the form  of  a Regulation,  is  clearly  proportionate  to  the  objective 
sought.  The  purpose  is  to  guarantee  equal  treatment  in  the  social  sphere,  with 
particular emphasis on the coordination of the Member States' social security schemes, 
among  Community  nationals  and  nationals  of  third  countries,  and  to  simplify  and 
clarify  the  relevant  legal  rules  applying to  the  latter  category  of  persons  within  the 
Community.  A  Regulation  is  deemed  to  be  the  most  appropriate  instrument  for 
achieving this objective. 

10 

IV.  APPLICATION 

IN  THE  COUNTRIES  OF  THE  EUROPEAN 

ECONOMIC AREA 

The  free  movement  of  persons  is  an  underlying  objective  and  principle  of  ti e 
Agreement  on  the  European  Economic  Area  (EEA),  which  entered  into  force  on 
1 January 199416. In Chapter  1  of Part III, dealing with the free movement of persons, 
services and capital, Articles 28, 29 and 30 are concerned with freedom  of movement 
for  workers  and  self-employed  persons.  More  particularly,  Article  29  restates  the 
principles set out in Article 51 of the EC Treaty relating to social security for workers 
moving  within  the  Community.  Consequently,  this  proposal  for  a  Regulation,  if 
adopted, must be applied to the EEA member countries. 

16  OJ  L  1,  3.1.1994,  as  amended  by  Decision  No  7/94  of  the  EEA  Joint  Committee  of  21  March  1994 

(OJL  160, 28.6.1994). 

11 

Proposal for a 
COUNCIL REGULATION (EC) 
amending Regulation (EEC) No 1408/71 as regards its extension 
to nationals of third countries 

(Text with EEA relevance) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Articles 51 and 235 thereof, 

Having  regard  to  the  proposal from the  Commission17,  presented  after  consultation  of the 
social partners and of the Administrative Commission on Social Security for Migrant Workers, 

Having regard to the opinion of the European Parliament18, 

Having regard to the opinion of the Economic and Social Committee19, 

Whereas the Corfu  European Council decided in June  1994 to  step up efforts  to  develop, at 
European Union level, a comprehensive strategy for combating racism and xenophobia; 

Whereas  the  Council  and  the  Member  States  recognized,  in their  Resolution  of  5 October 
1995  on  the  fight  against  racism  and  xenophobia  in  the  fields  of  employment  and  social 
affairs20,  "the great importance of implementing, in the field of social policy, policies based on 
the principles of non-discrimination and equal opportunities at Union and Member State level, 
within the framework of their respective powers, as a contribution to the common fight against 
racism and xenophobia"; 

Whereas the European Parliament  has on several  occasions called  for  equal treatment  to be 
given to Community nationals and nationals of third countries in the social sphere, for example 
in  its  Resolution  of  30 January  1997  on  racism,  xenophobia  and  anti-Semitism  and  the 
European Year against Racism (1997)21; 

Whereas the Economic and Social Committee has echoed this call, particularly in its opinion of 
26 September 1991 on the status of migrant workers from third countries22; 

17  OJ 
18  OJ 
19  OJ 
20  OJÇ296,  10.11.1995, p. 13. 
21  OJ C 55, 24.2.  1997, p. 17. 
22  OJC339,  31.12.  1991, p. 82. 

12 

Whereas, in the preamble to the Single European Act, the Member States emphasize the need 
"to work together to promote democracy on the basis of the fundamental rights recognized in 
the  constitutions  and  laws  of  the  Member  States,  in  the  Convention  for  the  Protection  of 
Human Rights and Fundamental Freedoms and the European Social Charter, notably  freedom, 
equality and social justice"; 

Whereas Article F(2) of the Treaty on European Union provides that the Union "shall respect 
fundamental  rights,  as  guaranteed  by  the  European  Convention  for  the  Protection  of 
Human Rights and Fundamental  Freedoms signed in Rome on 4 November  1950 and as they 
result from the constitutional traditions common to the Member States, as general principles of 
Community law"; 

Whereas the promotion of a high level of social protection and the raising  of the standard  of 
living and quality of life in the Member States are objectives of the Community: 

Whereas Council Regulation (EEC) No  1408/71  of  14 June  1971  on the application of social 
security  schemes  to  employed  persons,  to  self-employed  persons  and  to  members  of  their 
families moving within the Community23  already applies to workers moving within the Union 
even where they have not exercised their right to freedom of movement as migrant workers; 

Whereas, given that certain provisions of Regulation (EEC) No  1408/71 are already applicable 
to  persons who  are notsitiigrant workers within the meaning of Article 48  of the EC Treaty, 
Article  51  of  the  EC  Treaty  allows  the  Community  to  coordinate  national  social  security 
schemes  for  all  workers  insured  under  one  of  those  schemes,  even  if they  are  not  migrant 
workers within the meaning of Article 48 of the EC Treaty; 

Whereas thé large number of legal instruments governing problems encountered  by nationals 
of  third  countries  in  connection  with  the  coordination  of  Member  States'  social  security 
schemes creates significant legal and administrative complexity; 

Whereas the lack of a clear and consistent set of rules for coordinating social security matters 
could  give rise to  specific  problems  such  as  double  levying  of  contributions  in  the  case  of 
service providers employing workers who are nationals of third countries; 

Whereas  the  application  of  Regulation  (EEC) No  1408/71  should  therefore  be  extended  to 
nationals of third countries; whereas that Regulation should be amended accordingly; 

Whereas transitional  provisions  should be adopted to  protect  the  persons  referred  to  by the 
present Regulation and to ensure that they do not lose rights as a result of its entry into force; 

23  OJ L 149, 5.7.1971, p. 2. Regulation updated by Regulation  (EC) No  118/97 (OJ L 28, 30.1.1997, p. 1) 

and last amended by Regulation (EC) No 1290/97 (OJ L 176, 4.7.1997, p. 1). 

13 

Whereas the extension  of Regulation  (EEC) No  1408/71 to  nationals  of third  countries will 
further  the aim of equal treatment  for  such persons with  Community  nationals  in the  social 
sphere,  particularly  as regards  coordination  of the  Member  States'  social  security  schemes, 
and is conducive to simplifying and clarifying the legal rules applicable within the Community; 

Whereas the extension of Regulation (EEC) No  1408/71 to nationals of third countries must 
not give the persons concerned any entitlement to enter, to stay or reside in a Member State or 
to have access to its labour market; 

Whereas,  to  achieve  these  objectives,  it  is  necessary  and  appropriate  that  the  rules  for 
coordinating  national  social  security  schemes be  amended  by  means  of  a  Community  legal 
instrument which is binding and directly applicable in every Member State; 

Whereas the amendments made by this Regulation are in accordance with the provisions of the 
third paragraph of Article 3 b of the Treaty, 

HAS ADOPTED THIS REGULATION. 

Article 1 

Regulation (EEC) No 1408/71 is hereby amended as follows: 

1. 

2. 

In Article 1, points (d) and (e) shall be deleted. 

Article 2 shall be amended as follows: 

(a) 

Paragraph  1  shall be replaced by the following: 

'7. 

This Regulation shall apply to employed or self-employed persons who 
are  or  have  been  subject  to  the  legislation  of  one  or  more 
Member States,  as  well  as  to  the  members of  their families  and 
their survivors. " 

(b) 

Paragraph 3 shall be deleted. 

3. 

Article 22a shall be replaced by the following: 

"Article 22a 
Special rules for certain categories of persons 

Notwithstanding Article 2, Article 22(1)(a)  and (c) shall also apply to persons who 
are insured under the legislation  of  a Member State and  to  the members of their 
families residing with them. " 

14 

4. 

The following Article 95c shall be inserted: 

"Article 95c 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

Transitional provisions for application of Regulation (EC) No* 

No entitlement for periods prior to ... shall be acquired under Regulation (EC) No .... ** 

Any  period  of  insurance  and,  where  appropriate,  any  period  of  employment, 
self-employment  or  residence  completed  under  the  legislation  of  a  Member  State 
before  .... shall be taken into consideration for the determination of rights acquired in 
accordance with the provisions of this Regulation. 

Subject  to  the  provisions  of  paragraph  1,  a  right  shall  be  acquired  under  this 
Regulation even where it relates to a contingency which materialized prior to .... 

Any benefit  which has not been awarded  or which has been suspended  on account of 
the nationality or the residence of the person concerned shall, at the latter's request, be 
awarded  or resumed with effect from ....,  provided  that the rights for  which  benefits 
were previously awarded did not give rise to a lump-sum payment. 

The rights of persons to whom a pension was awarded prior to  .... may be reviewed at 
their request, taking into account the provisions of Regulation (EC) No .... 

If the request  referred  to  in paragraph  4  or  paragraph  5 is lodged  within two years 
from  ...., the rights acquired under this Regulation shall have effect from that date, and 
the  provisions  of  the  legislation  of  any  Member  State  concerning  the  forfeiture  or 
limitation of rights may not be invoked against the persons concerned. 

If the request  referred  to  in paragraph 4 or paragraph  5 is lodged  after  expiry of the 
period referred to in paragraph 6, rights which have not been forfeited  or which are not 
statute-barred  shall  have  effect  from  the  date  of  such  request,  except  where  more 
favourable provisions of the legislation of any Member State apply." 

Number of the Regulation resulting from this proposal. 
Date of entry into force of the Regulation  resulting from  this proposal. 

15 

Article 2 

This Regulation shall enter into force on the first day of the month following its publication in 
the OfficialJournal of the European Communities. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 
The President 

16 

ISSN 0254-1475 

COM(97) 561 final 

DOCUMENTS 

EN 

04  05  06 

Catalogue  number  :  CB-CO-97-620-EN-C 

ISBN  92-78-27616-2 

Office  for  Official  Publications  of the European  Communities 

L-2985  Luxembourg 

17