COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS The External Dimension of EU Social Security Coordination
Date: 2012-03-30
Institutions: European Commission
Subjects: EU Member State, European cooperation, association agreement (EU), bilateral agreement, social security legislation, social-security harmonisation, third country

EUROPEAN COMMISSION 

Brussels, 30.3.2012  
COM(2012) 153 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

The External Dimension of EU Social Security Coordination 

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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

The External Dimension of EU Social Security Coordination 

Introduction 

In a globalised economic environment, labour mobility both within the EU and between the 
EU and the rest of the world is a growing reality and necessity. Social security coordination is 
a  system  of  rules  aimed  at  facilitating  such  mobility.  The  EU  has  had  a  system  of  social 
security coordination rules for mobility within the EU for over 50 years1. More recently, these 
rules were extended to cover Iceland, Liechtenstein, Norway and Switzerland2. 

Social  security  coordination  between  the  EU  and  the  rest  of  the  world  is  dealt  with  in  two 
ways. On the one hand, there is the national approach, whereby Member States make bilateral 
agreements  with  selected  third  countries.  This  approach  is  patchy:  there  is  an  incomplete 
network  of  agreements,  and  agreements  tend  to  have  differing  content  from  country  to 
country. 

On the other hand, a common EU approach to social security coordination with third countries 
is now developing. 

Against this background, this Communication has four aims: 

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to underline that migrants and businesses from third countries, who generally see the 
EU as a single entity, face fragmented social security systems which create obstacles 
in terms of entering, moving within and leaving the EU; 

to  make  the  case  for  promoting  and  strengthening  cooperation  between  Member 
States  so  that  a  less  fragmented  approach  to  social  security  coordination  with  third 
countries can be developed; 

to  set  out  the  various  ways  in  which  the  EU  rules  already  impact  on  the  external 
dimension and to give clear guidance on the legal relationship between EU law and 
national bilateral agreements; 

to  describe  the  existing  components  of  a  common  EU  approach  and  to  make 
proposals for developing this further. 

The rules are currently contained in Regulation (EC) No 883/2004 on the coordination of social security 
systems  and  its  implementing  Regulation  (EC)  No  987/2009,  OJ  L166,  30.5.2004,  p. 1;  OJ  L284, 
30.10.2009, p. 1. 
The  Agreement  on  the  European  Economic  Area  came  into  force  on  1  January  1994  (but  became 
applicable  for  Liechtenstein  only  on  1  May  1995),  OJ  L  1,  3.1.1994,  p.  3.  The  EU-Switzerland 
Agreement entered into force on 1 June 2002, OJ L 114, 30.4.2002, p. 1. 

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1. 

MEMBER STATES' BILATERAL AGREEMENTS WITH THIRD COUNTRIES 

1.1.  What do national bilateral agreements cover? 

The  social  security  rights  of  persons  moving  into  and  out  of  the  EU  are  still  dealt  with 
predominantly  under  national  rules.  Individual  Member  States  conclude  bilateral  social 
security coordination agreements with third countries, and these agreements set up a system 
of coordination rules for persons moving between the two countries. The reasons behind such 
agreements vary: traditionally they are aimed at protecting citizens who are working in other 
states; increasingly, though, they are viewed as a way of attracting businesses and labour from 
third  countries.  Making  an  agreement  can  also  be  an  expression  of  political  friendship 
between  countries.  EU  Member  States  are  also  parties  to  multilateral  social  security 
agreements,  e.g.  the  Ibero-American  Social  Security  Convention,  to  which  both  Spain  and 
Portugal are parties. 

Most agreements with third countries typically contain rules on applicable legislation, equal 
treatment and pensions. The pension provisions protect migrants’ acquired rights when they 
leave the national territory and allow payment of the pension in the other territory. In some 
cases,  provision  is  made  for  aggregating  insurance,  employment  or  residence  periods.  The 
applicable legislation rules generally include 'posting' provisions. These enable workers who 
fulfil  certain  conditions  to  remain  subject  to  the  social  security  legislation  of  the  sending 
country and exempt them from paying social security contributions in their country of work. 
The principle of equal treatment guarantees migrant workers the same treatment as nationals 
of the country of work. 

EU  Member  States  generally  negotiate  bilateral  agreements  without  reference  to  what  their 
partner  EU  countries  are  doing.  The  process  is  highly  fragmented.  In  practice,  certain  EU 
countries  may  be  pinpointed  by  the  EU’s  main  trading  partners  for  the  conclusion  of 
agreements,  whilst  other  countries  are  left  out.  There  is  no  mechanism  for  harmonising 
approaches,  and  similarly  no  mechanism  whereby  EU  countries  can  get  together  to  solve 
common problems they face with a particular country. 

Moreover,  the  country-specific  nature  of  these  national  bilateral  agreements  means  that 
migrants and businesses based in third countries not only deal with fragmented social security 
systems when moving between EU countries, but are also confronted with distinctive national 
bilateral  agreements  when  moving  into  and  out  of  the  EU.  The  network  of  bilateral 
agreements is by no means complete: depending on the third country in question, there may 
be  no  bilateral  agreement  in  existence  with  the  relevant  EU  country.  This  can  mean  loss  of 
acquired social security rights for persons moving out of, or back into, the EU. This is just as 
likely to affect migrant EU citizens as migrants from third countries. Overall there is a lack of 
transparency as to what citizens’ rights are. 

1.2. 

The impact of EU law on national bilateral agreements 

The Gottardo Judgment 

National  bilateral  agreements,  like  any  other  type  of  Member  State  law,  are  subject  to  the 
supremacy of EU law. This was made clear in the field of social security in 2002 when the 
Court of Justice of the European Union held, on the basis of Article 39 EC (now Article 45 
TFEU), that Member States may not limit the application of social security agreements made 

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with third countries to their own nationals and must treat other EU nationals equally under the 
terms  of  the  agreement3.  The  result  of  this  ruling,  known  as  the  Gottardo  judgment,  means 
that  EU  Member  States  which  operate  agreements  based  on  nationality,  need  to  adjust  the 
application of their agreements with third countries to ensure that they can benefit nationals of 
other Member States likewise4. 

Regulation No 1231/2010 

The  EU  social  security  coordination  rules  also  impact  on  the  ability  of  Member  States  to 
apply  rules  they  have  set  down  in  bilateral  agreements.  The  EU  rules,  contained  in 
Regulations (EC) No 883/2004 and (EC) No 987/2009 on the coordination of social security, 
contain  a  system  of  coordination  for  persons  who  move  within  the  EU.  The  rules  were 
extended  in  2003  to  cover  all  third  country  nationals  legally  resident  in  the  EU  and  ‘in  a 
situation which is not confined in all respects within a single Member State’. The regulation 
in  force  is  Regulation  (EU)  No  1231/20105.  It  is  in  effect  a  ‘bridge’  that  allows  all  persons 
legally  resident  in  one  EU  country,  but  featuring  a  cross-border  element  of  some  sort,  to 
benefit from the EU coordination rules. This covers practical issues such as enjoying the same 
rights as EU nationals to receive all necessary medical care during a temporary stay in another 
Member State (an entitlement evidenced by the European Health Insurance Card)6. 

The  existence  of  Regulation  (EU)  No  1231/2010  gives  the  EU  exclusive  competence  as 
regards the social security coordination rights of nationals from third countries who are in a 
cross-border  situation  within  the  EU.  In  cases  of  conflict,  EU  Regulations  take  precedence 
over national rules contained in bilateral agreements with third countries. Where, for example, 
a national from a third country is sent to an EU state under the terms of a bilateral agreement 
with a third country and then moves to work in another Member State, Regulation (EU) No 
1231/2010  will  apply  to  this  second  move.  Further,  where  a  national  from  a  third  country 
works  in  two  or  more  Member  States  for  an  employer  established  outside  the  EU,  the  EU 
rules on applicable social security legislation will apply7. 

1.3. 

Common practical issues and challenges 

Member  States  are  required  by  the  'duty  of  loyal  cooperation'  in  Article  4(3)  TEU  and  by 
Article  351  TFEU  to  take  all  appropriate  steps  to  eliminate  incompatibilities  between 
agreements they have with third countries and their duties arising from EU law. As regards 
the  impact  of  both  the  Gottardo  ruling  and  Regulation  (EU)  No  1231/2010  on  bilateral 
agreements,  Member  States  need  to  secure  cooperation  from  the  third  country  concerned  in 
ensuring that EU obligations can be met. This gives rise to a number of common challenges. 

To be in compliance with the Gottardo judgment, the bilateral agreement needs to be applied 
in  accordance  with  the  EU  principle  of  non-discrimination.  This  may  involve  renegotiating 
the agreement, or simply obtaining consent that a non-discrimination clause be incorporated 

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Case C-55/00. 
Recommendation  No  P1  of  12  June  2009  of  the  Administrative  Commission  for  the  Coordination  of 
Social Security Systems, OJ C106, 24.4.2010, p 47. 
OJ  L  344,  29.12.2010,  p. 1.  The  United  Kingdom  continues  to  be  bound  by  and  subject  to  the 
application of the previous Regulation (EC) No 859/2003. Denmark is not bound by or subject to the 
application of Regulation (EU) No 1231/2010 nor of Regulation (EC) No 859/2003 The EEA states and 
Switzerland do not apply either of these regulations. 
Article 19 of Regulation (EC) No 883/2004. 
See, for example, Article 14(11) of Regulation (EC) No 987/2009. 

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into  the  agreement.  In  practical  terms,  Member  States  may  need  to  obtain  social  insurance 
records from third countries for nationals of EU states other than their own. This often raises 
administrative  and  legal  difficulties.  The  fundamental  problem  remains  that,  whilst  the  EU 
Member State is obliged to comply with EU law, the third country is generally not bound to 
cooperate on these issues. 

Ensuring that the way bilateral agreements are applied is compatible with Regulation (EU) No 
1231/2010 raises similar issues. There is a need to explain to third countries that, in certain 
circumstances,  bilateral  agreements  cannot  be  applied  as  EU  law  has  primacy.  This  is  a 
problem for all the Member States, but at present there is no common mechanism for Member 
States to deal with this. One possible simple solution is to include a clause in all agreements 
to  the  effect  that,  in  cases  of  conflict,  EU  law  will  take  precedence  over  the  terms  of  the 
agreement. 

In  terms  of  substantive  common  concerns  for  Member  States,  one  such  concern  is  how  to 
resist pressure to agree to long posting periods, which have the effect that workers from the 
third country are exempted from contributing to the Member State’s social security system. In 
the EU, the maximum period for which a worker can remain insured in the Member State of 
origin  is  two  years8.  However,  workers  posted  into  the  EU  from  third  countries  can  remain 
insured in their country of origin for much longer periods, and this exemption from affiliation 
within the EU is frequently a sensitive point in concluding modern bilateral agreements. 

Finally, obtaining data from the third country is a key concern for most Member States in the 
context  of  taking  action  to  combat  fraud.  The  EU  social  security  coordination  rules  contain 
legal provisions which allow a Member State to request verification of information from the 
Member State where the beneficiary resides9. This enables paying institutions to ensure, for 
example,  that  the  beneficiary  of  a  pension  is  still  alive  or  that  a  person  still  meets  the 
conditions for receipt of an invalidity pension. Not many bilateral agreements contain this sort 
of  verification  mechanism.  Many  Member  States  would  welcome  the  introduction  of  an 
efficient approach to combating fraud. 

1.4. 

Strengthening cooperation on social security coordination with third countries 

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In  view  of  the  practical  issues  and  challenges  outlined  above,  it  is  clear  that  better 
cooperation  between  Member  States  on  social  security  coordination  with  third 
countries would be advantageous in many respects. If Member States cooperate and, 
where appropriate, act together, they will enjoy a stronger bargaining position vis-à-
vis third countries, be better placed to solve common problems and together ensure 
that the way they apply bilateral agreements complies with EU law. In general terms, 
greater cooperation should lead to a more coherent overall approach by EU countries. 

In this respect, a mechanism is needed at EU level to strengthen cooperation between 
Member States. With this in mind, the Commission will give its backing to a results-
orientated working group of experts from the Member States —meeting on an annual 
basis  —  in  order  to  facilitate  such  cooperation.  The  working  group  will  also  be  an 
opportunity  for  the  Commission  to  share  information  on  the  state  of  play  in  the 
negotiation  of  EU  agreements  with  third  countries.  The  new  mechanism  will  also 

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Article 12 of Regulation (EC) No 883/2004. 
Article 5(3) of Regulation (EC) No 987/2009. 

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ensure complementarity between the national bilateral approach and the developing 
EU approach to social security coordination with third countries. 

2. 

THE DEVELOPMENT OF A COMMON EU APPROACH 

2.1. 

Regulation (EU) No 1231/10 

Regulation  (EU)  1231/10  applies  the  EU  social  security  coordination  regulations  to  legally 
resident third-country  nationals who  are ‘in a situation which  is not confined in  all respects 
within a single Member State’. One effect of the Regulation is that citizens within its scope 
can benefit from the principle of equal treatment contained in Article 4 of Regulation (EC) No 
883/2004. This means that any third-country national in a cross-border situation falling within 
the scope of Regulation (EU) No 1231/2010, who is entitled to an  old-age pension from an 
EU state, will enjoy equal treatment with nationals of the paying state as regards payment of 
this pension outside the EU10. 

The Commission believes there is a need for effective enforcement of the principle of equal 
treatment when it comes to paying pensions in a third country. This is all the more important 
given the case-law of the European Court of Human Rights, to the  effect  that  the right to a 
pension  which  is  based  on  employment  can  in  certain  circumstances  be  assimilated  to  a 
property  right  protected  by  the  European  Convention  on  Human  Rights11.  To  this  end,  the 
Commission  will  use  its  network  of  national  social  security  experts  to  gather  information 
about legislation and other measures at national level concerning the payment of pensions in 
third countries. This information will be added to the country-specific social security profiles 
on the Commission’s website, and will be supplemented with information on Member States' 
bilateral agreements with third countries, again using information provided by national social 
security experts. 

2.2. 

Rights given by EU migration instruments 

EU migration rules have imposed standards that national social security legislation must meet 
in the case of third-country nationals who reside in a Member State. For example, after five 
years' legal residence in an EU Member State, and assuming certain conditions are met, third-
country  nationals  acquire  the  same  rights  as  nationals  in  respect  of  social  security,  social 
assistance and social protection as defined by national law12. In addition, there are three EU 
migration  directives,  the  so-called  "Single  Permit"  Directive13,  the  so-called  "Blue  Card" 
Directive14  and  a  Directive  dealing  with  third-country  researchers15,  which  guarantee  third-
country  nationals  admitted  to  Member  States  –  subject  to  certain  limited  exceptions  -  equal 
treatment  in  social  security  with  nationals  of  the  state  where  they  reside.  This  guarantee 

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See Recital 13 of Regulation (EU) No 1231/2010. 
ECHR, Klein v Austria (App no. 57028/00), 3 March 2011. 
Article 11 of Council Directive 2003/109/EC concerning the status of third-country nationals who are 
long-term residents, OJ L16, 23.1.2004, p. 44.  
Directive 2011/98/EU of the European Parliament and of the Council on a single application procedure 
for a single permit for third-country nationals to reside and work in the territory of a Member State and 
on  a  common  set  of  rights  for  third-country  workers  legally  residing  in  a  Member  State,  OJ  L343, 
23.12.2011, p. 1. 
Council Directive 2009/50/EC on the conditions of entry and residence of third country nationals for the 
purposes of highly qualified employment, OJ L155, 18.6.2009, p. 17.  
Council  Directive  2005/71/EC  on  a  specific  procedure  for  admitting  third-country  national  for  the 
purposes of scientific research, OJ L 289, 12.10.05, p. 15.  

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includes equal treatment as regards the transfer of their state pensions to a third country and is 
not  dependent  on  the  existence  of  bilateral  agreements16.  The  Commission’s  proposals  for 
further EU migration directives contain similar equal treatment clauses17. 

2.3. 

Association Agreements and Stabilisation and Association Agreements 

Generally, Association Agreements (including the Stabilisation and Association Agreements 
concluded with the countries of the Western Balkans) contain a number of principles which 
are  to  govern  the  coordination  of  social  security  rules  for  workers  and  their  families,  who 
move  between  an  EU  country  and  the  associated  country.  In  addition,  the  Association 
Councils set up by these Agreements are given the task of adopting provisions to implement 
these principles. 
In October 2010, the Council took a first step in this process by deciding on the position to be 
taken  by  the  EU  within  the  Association  Councils  set  up  by  the  Agreements  with  Algeria, 
Morocco,  Tunisia,  Israel,  Croatia  and  the  former  Yugoslav  Republic  of  Macedonia  on  the 
adoption  by  those  Councils  of  decisions  regarding  the  coordination  of  social  security 
systems18.  

These Association Council decisions should cover the following rights for legally employed 
workers: equal treatment with workers in the host state ; export of the full amount of old-age, 
survivors’  and  invalidity  pensions  and  pensions  in  respect  of  accidents  at  work  and 
occupational diseases outside the territory of the paying state; and equal treatment for legally 
resident  family  members.  The  rights  should  be  reciprocal  —  EU  workers  enjoy  the  same 
rights both in the associated countries and on their return to the EU. Enjoyment of these rights 
should not depend on internal movement within the EU. These decisions should also provide 
for  a  reciprocal  framework  of  cooperation  and  verification  mechanisms  to  combat  fraud. 
Provisions of bilateral agreements concluded between the associated countries and individual 
Member  States,  which  provide  for  more  favourable  treatment  of  nationals  of  the  associated 
countries or Member States, will continue to apply (taking into account, as the case may be, 
the above-mentioned Gottardo case-law of the Court).  

Once  the  Association  Council  Decisions  are  adopted,  the  common  EU  approach  to  social 
security  coordination  will  be  effectively  implemented,  with  direct  effect  in  national  law. 
Following  on  from  this,  the  Commission  will  propose  certain  practical  administrative 
arrangements  of  a  non-legislative  nature  to  facilitate  the  application  of  these  Association 
Decisions.  The  Commission  will  help  the  Member  States  to  apply  these  Decisions:  it  will 
organise  annual  meetings  to  discuss  the  coordination  arrangements  with  the  associated 
countries and to facilitate cooperation generally; it will monitor closely the way the Member 
States are applying the Decisions. 

Finally,  no  discussion  of  EU  association  agreements  and  social  security  coordination  would 
be complete without a mention of the Association Agreement with Turkey, and in particular 

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This right is granted explicitly by Article 14(1)(f) of Directive 2009/50/EC, but must also be inferred 
from the terms of Article 12(c) of Directive 2005/71/EC. 
Proposal for a Directive of the European Parliament and of the Council on the conditions of entry and 
residence  of  third-country  nationals  for  the  purposes  of  seasonal  employment,  COM(2010)  379  final; 
Proposal for a Directive of the European Parliament and of the Council on the conditions of entry and 
residence of third-country nationals in the framework of an intra-corporate transferee, COM(2010) 378 
final. 
OJ L306, 23.11.2010. 

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the 1970 Additional Protocol to that Agreement19, which provide as an aim, to be achieved by 
progressive stages, the free movement of workers between Turkey and the EU. In this context, 
Article 39 of the Additional Protocol requires the Association Council to adopt social security 
measures  for  Turkish  workers  moving  within  the  EU.  This  provision  was  executed  by 
Association Council Decision No 3/8020. Although the necessary implementing measures for 
this  decision  were  never  adopted,  the  Court  of  Justice  has  held  that  the  equal  treatment 
principle  and  the  pension  export  clause  in  Decision  No  3/80  are  directly  applicable21. 
Therefore, by virtue of the case-law of the Court of Justice, there is in effect already a certain 
common EU approach to social security coordination for Turkish workers in the EU. 

2.4. 

Using association agreements to develop further a common EU approach 

The EU and its Member States have not only taken on social security coordination obligations 
with respect to Turkey, but also in the agreements with Albania, Montenegro and San Marino. 
The implementation of these provisions is still outstanding. The Commission believes that the 
legal  obligations  set  out  in  these  agreements  should  be  observed,  so  it  will  be  proposing  a 
second package of Council decisions on the position to be taken by the EU within the relevant 
Stabilisation  and  Association,  Association  or  Cooperation  Councils  concerning 
the 
coordination of social security systems with these countries. 

For Turkey in particular, the Commission believes that steps should be taken to replace and 
update Association Council Decision No 3/8022. This is all the more necessary in the light of 
the recent judgment of the Court of Justice in Case C-485/07, Akdas. The Commission’s new 
proposal for implementing the social security aspects of the Association Agreement will, for 
example, take into account the principle in Regulation (EC) No 883/2004 that ‘special non-
contributory cash benefits’ are not exportable.  

As  regards  the  negotiation  of  new  Association  Agreements  with  third  countries,  the 
Commission will seek to include a standard social security coordination clause, based on the 
principles of equal treatment, export of pensions and administrative cooperation. 

2.5. 

New EU social security agreements 

In order to take into account the needs of the globalised labour market, the Commission will 
open  a  debate  in  the  Administrative  Commission  for  the  Coordination  of  Social  Security 
Systems  to  consider  whether,  in  certain  circumstances,  there  may  be  a  need  for  Member 
States to act jointly on social security coordination in respect  of  a  given third  country.  This 
need  could  be  addressed  by  a  new  instrument  —  an  EU  social  security  agreement.  Such 
agreements  would  allow  a  more  flexible  approach  to  social  security  coordination  than  is 
possible under association agreements and could also be concluded with third countries with 
which  no  association  or  cooperation  agreement  exists.  An  EU  agreement  could  be  made  as 

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21 

22 

Additional Protocol of 23.11.1970 to the Agreement establishing an Association between the EEC and 
Turkey , OJ L293, 29.12.1972, p. 3. 
Decision 3/80 of the Association Council of 19 September 1980 on the application of the social security 
schemes of the Member States of the European Communities to Turkish workers and members of their 
families, OJ C110, 25.4.1983, p. 60. 
Case C-262/96, Sürül; Case C-485/07, Akdas; see also judgments in Case C-18/90, Kziber; C-103/94, 
Krid,  concerning  the  equal  treatment  clause  in  the  cooperation  agreements  with  Maghreb  countries, 
which are now replaced by Association Agreements. 
The Commission will withdraw its earlier proposal to implement Association Council Decision No 3/80 
(COM(83) 13). 

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and when a need arose — for example, to deal with difficulties arising with a particular third 
country from the application of Regulation (EU) No 1231/2010 or to address issues linked to 
double social security contributions. Such agreements would offer the possibility to integrate 
possible bilateral particularities between a Member State and the third country concerned and 
their application could be optional for the Member States. 

The  Commission  foresees  such  made-to-measure  agreements  being  concluded  with  some  of 
the EU’s strategic partners, in particular those with whom there are significant movements of 
labour. An agreement with the countries of a regional integration organisation could also be 
explored. The overall aim of such agreements would be to promote a coherent EU approach 
vis-à-vis the third country concerned. 

2.6. 

Strengthening the EU’s external profile on social security 

Finally, as the Europe 2020 Strategy underscored, it is essential for the EU to look outwards 
and  to  participate  in  key  discussions  and  actions  on  regulatory  issues  at  a  global  level.  As 
states  increasingly  move  to  work  together  on  cross-border  social  security  matters,  the  EU 
should, given its long experience of social security coordination, take a lead role. This should 
include cooperation with other international organisations, such as the ILO. The International 
Labour  Conference  in  2011  called  upon  ILO  member  states  to  consider  the  conclusion  of 
agreements to provide equality of treatment, as well as access to and the preservation and/or 
portability of social security entitlements for migrant workers. Discussion on social protection 
and social security coordination with other regions in the world is of growing importance. The 
Commission  will  therefore  promote  cooperation  on  social  security  coordination  with  other 
international organisations and with other parts of the world. 

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