Explanatory Memorandum to COM(2010)378 - Conditions of entry and residence of third-country nationals in the framework of an intra-corporate transfer - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2010)378 - Conditions of entry and residence of third-country nationals in the framework of an intra-corporate transfer. |
|---|---|
| source | COM(2010)378  |
| date | 13-07-2010 |
- Grounds for and objectives of the proposal
This proposal forms part of the EU’s efforts to develop a comprehensive immigration policy. The Hague Programme of November 2004 recognised that ‘legal migration will play an important role in enhancing the knowledge-based economy in Europe, in advancing economic development and thus contributing to the implementation of the Lisbon Strategy’ and asked the Commission to present a policy plan on legal migration ‘including admission procedures capable of responding promptly to fluctuating demands for migrant labour in the labour market’.
The subsequent December 2005 Commission Communication A Policy Plan on Legal Migration (COM(2005) 669) provided for the adoption of five legislative proposals on labour immigration, including a proposal for a directive on intra-corporate transferees, between 2007 and 2009.
The European Pact on Immigration and Asylum, adopted by the European Council of 15 and 16 October 2008, expresses the commitment of the European Union and its Member States to conduct a fair, effective and consistent policy for dealing with the challenges and opportunities created by migration.
The Stockholm Programme, adopted by the European Council of 10 and 11 December 2009, recognises that labour immigration can contribute to increased competitiveness and economic vitality and that, in the context of the important demographic challenges that will face the EU in the future with an increased demand for labour, flexible immigration policies will make an important contribution to the EU’s economic development and performance in the longer term. It thus invites the Commission and Council to continue to implement the 2005 Policy Plan on Legal Migration.
The proposals regarding highly qualified workers (‘EU Blue Card’) and for a general Framework Directive were presented in October 2007 i. The Council adopted the first of these proposals on 25 May 2009; the second one is currently being negotiated in the European Parliament and in the Council.
In face of the obstacles encountered by businesses in relation to the complexity and diversity of rules, the aim of this Directive is, in particular, to facilitate intra-corporate transfers of skills both to the EU and within the EU in order to boost the competitiveness of the EU economy, and to complement the set of other measures the EU is putting in place to achieve the goals of the EU 2020 Strategy. It is specifically aimed at responding effectively and promptly to demand for managerial and qualified employees for branches and subsidiaries of multinational companies by setting up transparent and harmonised conditions of admission of this category of workers, by creating more attractive conditions of temporary stay for intra-corporate transferees and their family and by promoting efficient allocation and re-allocation of transferees between EU entities. Achieving this objective would also help to meet the EU’s international trade commitments, including specific rules on intra-corporate transferees. Promotion of such transnational movements requires a climate of fair competition and respect for the rights of workers, including creating a secure legal status for intra-corporate transferees.
- General context
As a result of the globalisation of business, increasing international trade, the growth and spread of multinationals and the ongoing restructuring and consolidation of many sectors, movements of managerial and technical employees of branches and subsidiaries of multinational corporations, temporarily relocated for short assignments to other units of the company, have become more crucial in recent years. The capacity of businesses to react more rapidly to new challenges, to transfer know-how to their future managers and to harmonise qualifications in every country where the company is active, is essential. Developments in the organisation of work and allocation within businesses also necessitate increasing mobility.
However, a number of factors currently limit the scope for international companies to rely on mobility of intra-corporate transferees. Many multinationals wishing to transfer their personnel have run into inflexibility and limitations, including the lack of clear specific schemes in most EU Member States, the complexity of requirements, costs, delays in granting visas or work permits and uncertainty about the rules and procedures. In addition, there are big differences between Member States in terms of conditions of admission and restrictions on family rights.0
- Existing provisions in the area covered by the proposal
The existing EU instrument addressing conditions for the admission of intra-corporate transferees in the context of the provision of a service is the 1994 Council Resolution on limitations on admission of third-country nationals to the territory of the Member States for employment i, adopted under Article K.1 of the EC Treaty. This set out definitions and principles governing admission of this category of migrants.
Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers by undertakings established in a Member State in the framework of the provision of services also has links to the present proposal, as its Article 1 i states that ‘ Undertakings established in a non-member State must not be given more favourable treatment than undertakings established in a Member State ’. This proposal consequently ensures that undertakings established in a non-Member State which post workers to a Member State in the framework of intra-corporate provision of services are not given any competitive advantage.
The EU-25 commitments under the General Agreement on Trade in Services (GATS) i open up the possibility to have recourse to intra-corporate transferees in the services sector and in the context of provision of services, typically without an economic needs test, for a maximum of three years (for managers and specialists) or one year (for graduate trainees), provided they meet the requirements specified in the relevant schedule, such as prior employment for one year. The EU-Chile Association Agreement concluded in 2002 and the Economic Partnership Agreement (EPA) with the CARIFORUM countries concluded in 2008 also included provisions on intra-corporate transfers which are based on those committed under the GATS. The trade commitments given under the GATS, as well as bilateral agreements, are not intended to cover exhaustively the conditions of entry, stay and work.
Council Directive 2003/86/EC of 22 September 2003 lays down the conditions under which the right to family reunification can be exercised. The present proposal goes further than that Directive in that it provides for more favourable conditions for family reunification.
The format of residence permits for third-country nationals is laid down in Regulation (EC) No 1030/2002 and applies to this proposal.
Council Directive 2005/71/EC of 12 October 2005 on a specific procedure for admitting third-country nationals for the purposes of scientific research lays down the conditions of admission of third-country researchers to the Member States for the purpose of carrying out a research project under hosting agreements with research organisations approved for that purpose by the Member State. As there are potential overlaps between the scopes of the two instruments and in order to maintain a coherent set of rules for third-country national researchers, the present proposal expressly states that it does not apply to third-country nationals who apply to reside in a Member State as researchers, within the meaning of Directive 2005/71/EC, in order to carry out a research project.
Moreover, the proposal for a Framework Directive i, presented on 23 October 2007 (COM(2007) 638), provides for two exclusions: people entering a Member State under commitments made in an international agreement facilitating the entry and temporary stay of certain categories of trade- and investment-related natural persons; and third-country nationals who are posted, irrespective of whether their undertaking is established in a Member State or in a non-member country. Intra-corporate transferees, who are seconded on the basis of a work contract with a third-country undertaking and encompass people entering a Member State under commitments such as those referred to above, are therefore excluded from the scope of this instrument and are accordingly subject to specific provisions on these aspects.
The ‘Blue Card’ Directive provides for the same exclusion as the Framework Directive as regards the people covered by trade agreements. In addition, applicants must present a work contract. Intra-corporate transferees are therefore excluded from its scope.
- Consistency with other EU policies and objectives
Measures to attract highly qualified third-country nationals, such as key staff of transnational corporations, are part of the broader framework identified by the EU 2020 Strategy, which set the objective of the Union becoming an economy based on knowledge and innovation, reducing the administrative burden on companies and better matching labour supply with demand. Facilitation of intra-corporate transfers is also an objective shared by EU trade policy.
This proposal complies with fundamental rights, especially Articles 15, 21 and 31 (fair and equal treatment), 12 (freedom of association and affiliation), 34 (social security) and 7 (respect for private and family life) of the Charter of Fundamental Rights, as it recognises and safeguards the principle of equal treatment for intra-corporate transferees and includes procedural guarantees and the right to family life.
Personal data that authorities are required to handle when implementing this proposal will have to be processed in accordance with Directive 95/46/EC on the protection of individuals with regard to the processing of personal data.
- Consultation of interested parties
Consultation methods, main sectors targeted and general profile of respondents A public consultation was conducted on the Green Paper on an EU approach to managing economic migration, including a public hearing on 14 June 2005. Further consultations were held by means of seminars and workshops. Member States were consulted in the Commission’s Committee on Immigration and Asylum. The external study commissioned to support the Impact Assessment included further consultation of the main stakeholders by means of questionnaires and interviews.
Summary of responses and how they have been taken into account Analysis of the 130 contributions sent during the public consultation showed general support for a common EU policy on economic immigration, albeit with big differences in the approaches to be followed and in the expected end-result. Another clear request was to propose simple, non-bureaucratic and flexible solutions. As a large number of Member States were not in favour of a horizontal approach, the Commission considered that a sectoral approach was more realistic and would respond better to the requests for flexibility.
- Collection and use of expertise
There was no need for external expertise.
- Impact assessment
The following options were considered:
Option 1: Status quo. Current developments in Member States would continue within the existing legal framework. However, this would mean that the EU as a whole would not be attractive for enterprises and companies, which would still face difficulties in making best use of their staff, although the need for highly qualified internal resources would be increasing.
Option 2: Directive dealing with the conditions of entry and residence of intra-corporate transferees. The EU legislation would provide a common definition of intra-corporate transferee, either targeting some specific positions within the transnational corporation, as in the schedules annexed to the GATS, or identifying key personnel through salary and qualifications criteria, as in the Blue Card Directive. It would also lay down harmonised criteria for entry, a common set of rights, a maximum duration of stay and provisions with respect to certain social and economic rights. This option would create a more transparent legal environment. However, the rules would still vary between Member States in terms of procedure and family rights and EU mobility would not be provided for.
Option 3: Directive providing for intra-EU mobility for intra-corporate transferees. In addition to the points covered by option 2, provisions would be introduced to allow intra-corporate transferees to move within the EU and work in several establishments located in different Member States. Swift and simple transfer from third-country to EU companies would, however, not be ensured and family issues would not be tackled.
Option 4: Directive facilitating family reunification and access to work for spouses. By way of derogation from Directive 2003/86/EC, family reunification would not be made dependent on obtaining the right of permanent residence and on the intra-corporate transferee having a minimum period of residence. Residence permits for family members would be granted more rapidly and in respect of access to the labour market, Member States would not be allowed to apply the time limit of 12 months. As a result, companies would be able to attract intra-corporate transferees more easily. However, the right to work for spouses could conflict with EU preference as expressed in the Acts of Accession.
Option 5: Directive laying down common admission procedures. A single document allowing the holder to work as an intra-corporate transferee and to reside on the territory of the Member State would be issued. In parallel, a maximum time for processing applications would be set (e.g. 1 month). This option would significantly improve the ability to transfer key personnel easily and rapidly and reduce the time and costs for attracting intra-corporate transferees.
Option 6: Communication, coordination and cooperation among Member States. This option would contribute, to a certain extent, to approximating national practices on third-country national intra-corporate transferees across the EU and creating a more harmonised legal framework. However, the impact is likely to be very limited if the measures are not mandatory.
Comparing the options and their impact, the preferred option is a combination of options 2, 3, 4 and 5 . A harmonised definition of intra-corporate transferee and harmonised conditions of entry and stay, provisions ensuring certain social and economic rights (option 2), intra-EU mobility (option 3), enhanced family rights (option 4, without access to the labour market for partners) and fast-track procedures (option 5) would contribute to better allocation of intra-corporate staff across third-country and EU entities and make the EU more attractive for third-country national key personnel of multinational corporations, while offering guarantees against unfair competition.
3)
Contents
- Legal elements of the proposal
- Budgetary implications
- 2) Consultation of interested parties and impact assessment
- 4) Legal basis
- 5) Subsidiarity principle
- 6) Proportionality principle
- 8) Additional information
- 9) Detailed explanation of the proposal
- Article 2
- Articles 3 and 4
- Article 5
- Articles 6, 7 and 8
- Articles 9, 10, 11, and 12
- Articles 13 and 14
- Article 15
- Article 16
- Articles 17, 18, 19, 20, 21 and 22
- Summary of the proposed action
The proposal establishes a transparent and simplified procedure for admission of intra-corporate transferees, based on a common definition and harmonised criteria: the transferee must occupy a post as manager, specialist or graduate trainee, as provided for in the EU’s commitments under GATS; the prior employment within the same group of undertakings must have lasted at least 12 months, if required by the Member State; an assignment letter must be produced confirming that the third-country national is transferred to the host entity and specifying the remuneration. Unless this condition conflicts with the principle of Union preference as expressed in the relevant provisions of the Acts of Accession, no labour market test would be performed. A specific scheme for graduate trainees is envisaged. Intra-corporate transferees admitted would be issued with a specific residence permit (marked ‘intra-corporate transferee’) allowing them to carry out their assignment in diverse entities belonging to the same transnational corporation, including, under certain conditions, entities located in other Member States. This permit would also give them favourable conditions for family reunification in the first Member State.
This proposal concerns conditions of entry and residence for third-country nationals and procedures for issuing the necessary permits. It also lays down the conditions under which a third-country national may reside in a second Member State. Consequently, the appropriate legal basis is Article 79(2)(a) and (b) of the Treaty on the Functioning of the European Union (TFEU).
The subsidiarity principle applies insofar as the proposal does not fall under the exclusive competence of the Union. The objectives of the proposal cannot be sufficiently achieved by the Member States for the following reasons:
- The treatment granted to intra-corporate transferees at EU level, combined with the conditions and procedures regulating such movements, have an impact on the attractiveness of the EU as a whole and influence the extent to which multinational companies decide to do business or invest in a certain area.
- Rigidities in transferring foreign intra-corporate transferees from one European corporate headquarters to another are extremely important for multinational companies. Action at EU level is the only way to remove these rigidities.
- A common legal framework laying down common conditions of admission for intra-corporate transferees, including in terms of social and economic rights, would prevent the risk of unfair competition.
- The big differences between Member States in terms of entry procedures and temporary residency rights could hamper uniform application of the international commitments which the EU and its Member States have taken on in the WTO negotiations.
The proposal therefore complies with the subsidiarity principle.
The proposal complies with the proportionality principle for the following reasons:
The instrument chosen is a directive, which gives Member States a high degree of flexibility when it comes to implementation.
A directive is the appropriate instrument for this action: it sets binding minimum standards but gives Member States flexibility in respect of the form and method for putting these principles into effect in their national legal system and general context. Non-binding measures would have too limited an effect, as potential ICTs and their host EU companies would continue to face an array of different rules for admission.
The action is limited to what is necessary to achieve the above aim. The proposed rules concern admission conditions, procedure and permit, as well as rights of ICTs, including intra-EU mobility, hence the areas that constitute elements of a common immigration policy under Article 79 of the Treaty. The administrative burden imposed on Member State in terms of change of legislation (design of specific rules on intra-corporate transfer) and cooperation would be moderate as intra-corporate transferees are already singled out by trade instruments and as this burden would be outweighed by the large benefits flowing from the enhanced possibility to easily transfer intra-corporate staff from one Member State to another.
7)
The proposal has no implications for the EU budget.
- Review/revision/sunset clause
The proposal includes a review clause.
- Correlation table
The Member States are required to communicate to the Commission the text of their national provisions transposing the Directive, together with a correlation table between those provisions and the Directive.
Article 1
The proposal is part of the EU’s efforts to put in place a comprehensive immigration policy, including common rules on economic migration. It has two specific purposes. The first is to introduce a special procedure for entry and residence and standards on the issue by Member States of residence permits for third-country nationals applying to reside in the EU for the purpose of an intra-corporate transfer (Article 79(2)(a) TFEU). The second purpose is to implement Article 79(2)(b) TFEU and define the rights of third-country nationals who are legally residing in a Member State under the terms of this proposal and determine the conditions under which they may reside in other Member States.
The proposal does not cover EU citizens and their family members, including those whose eligibility for employment in a particular Member State is restricted by transitional arrangements. This Directive applies only to third-country nationals who reside outside the territory of a Member State and apply to be admitted to the territory of a Member State in the framework of an intra-corporate transfer.
As there are potential overlaps between the scopes of the Directive 2005/71/EC of 12 October 2005 on third-country national researchers and the present instrument, this Article expressly excludes from the scope of the Directive third-country nationals who apply to reside in a Member State as researchers, within the meaning of Directive 2005/71, in order to carry out a research project. The present Directive also excludes persons who enjoy rights of free movement equivalent to those of EU citizens or are employed by an undertaking established in a third country, as well as third-country nationals posted by undertakings established in a Member State in the framework of a provision of services in accordance with Article 56 of the Treaty and Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 on the posting of workers in the framework of the provision of services.
The proposal defines the concept of ‘intra-corporate transferee’. This definition builds on specific EU-25 commitments under the GATS and bilateral trade agreements and is based on:
- the existence of a transnational corporation, including one or more entities established outside the territory of a Member State and one or more entities located in the Member States (‘host entities’);
- temporary secondment of a third-country national from the company located in the third country, to which the third-country national is bound by a work contract, to an EU entity belonging to the same group of undertakings. This transfer does not necessarily take place within the services sector or in the context of provision of a service and may originate in a third country which is not party to a trade agreement: the scope of this proposal is therefore broader than that implied by trade commitments.
This Article also defines the concepts of ‘manager’, ‘specialist’ and ‘graduate trainee’. The existing definitions are based on the EU commitments schedule under the GATS, as these definitions are already familiar to the Member States. In addition, the definition of graduate trainees has been specified in order to clarify that the training should aim at preparing the transferee for managerial positions.
Other definitions are referring to existing EU instruments such as Council Directive 2003/86/EC or Council Directive 2009/38/EC.
These Articles allow Member States to maintain or introduce provisions that are more favourable to third-country nationals, provided they are more favourable for the persons to whom they apply. Member States might wish, for instance, to apply more favourable procedures or provisions as regards family members.
This Article lays down the conditions which applicants must fulfil, those specific to this proposal being as follows.
Evidence must be provided that the transfer is actually taking place between entities of a same group of undertakings.
As admission is demand-driven, a document describing the tasks assigned and specifying the remuneration, which must be in line with the terms and conditions of employment as referred to in Article 3 of Directive 96/71/EC, must be produced. It usually takes the form of an assignment letter. This document must indicate the place or places and duration of the assignment and provide evidence that the transferee is taking a post in the host entity as a manager, specialist or graduate trainee. This scheme targets key personnel, as usually defined in the EU commitments on trade, as they bring with them new technologies, innovation, or serve as vehicles to corporate culture in diverse locations and help establish operations in emerging markets, resulting in the end in an enhanced competitiveness of EU business. In order to ensure that the skills of the intra-corporate transferee are specific to the host entity and in accordance with the EU’s commitments on trade, there is a possibility for Member States to require a period of 12 months of prior employment within the group of undertakings. As the scheme focuses specifically on temporary migration, the applicant must provide evidence that the third-country national will be able to transfer back to an entity belonging to the same group and established in a third country at the end of the assignment.
The third-country national must fulfil the conditions set under national legislation for EU citizens to exercise the regulated profession specified in the assignment letter and, for non regulated professions, present documents showing the details of his or her professional qualifications (usually the resume). For the graduate trainee, the applicant should provide evidence of the higher education qualifications required, as provided under the EU’s commitments on trade.
In addition, third-country nationals who apply to be admitted as a graduate trainee must present documents proving that they will benefit from genuine training and not be used as normal workers. Therefore, a training agreement including a description of the training programme, its duration and the conditions in which the trainees will be supervised in this programme is required.
To facilitate checks, if the transfer involves several locations in different Member States, the competent authorities of the ancillary host entities must be informed by the applicant.
No labour market test is required, since this criterion would be in contradiction with the purpose of setting up a transparent and simplified scheme for admission of such skilled intra-corporate transferees. In addition, for those intra-corporate transferees who are covered by them, this condition would run counter to the EU’s commitments under the GATS and under those of bilateral trade agreements. As primary law prevails, for Member States which happen to apply a transitional period to new Member States, EU preference must however be applied.
The proposal does not create a right of admission, as this Directive is without prejudice to the right of the Member States to determine the volumes of admission of third-country nationals entering their territory for the purposes of intra-corporate transfer. However, this right should be used in accordance with the commitments resulting from international agreements facilitating the entry and temporary stay of certain categories of trade- and investment-related natural persons.
These provisions lay down the mandatory and possible grounds for refusal (as well as for withdrawal and non-renewal), notably failure to fulfil the criteria and sanctioning of the employer for undeclared work or illegal employment, in accordance with Directive 2009/52/EC of 18 June 2009 on sanctions, and the existence of quotas. In the event of non-compliance with the conditions laid down in Article 5, Member States should provide for appropriate sanctions, such as financial sanctions, to be imposed on the host entity, which would be held responsible.
Applicants who fulfil the admission criteria will receive a specific residence permit entitling the holder to work as an intra-corporate transferee under the conditions specified in Article 14. No additional work permit may be required. A competent authority must be designated by the Member States to receive the applications and issue the permits. This designation will apply without prejudice to the role and responsibilities of other national authorities with regard to examining and deciding on applications. Furthermore, this designation to receive the applications and issue the permits should not prevent Member States from appointing other authorities (e.g. consular offices) with which the third-country national or the host entity can lodge the application and which can issue the permit.
The duration of the residence permit will be limited to three years for managers and specialists and one year for graduate trainees. A short time (30 days) is allowed to process applications, accompanied by various procedural safeguards, including the possibility of a legal challenge against decisions rejecting an application and the requirement for the authorities to give reasons for such decisions. Information on entry conditions including working conditions must be available.
A fast-track procedure may be set up for groups of undertakings which have been recognised for this purpose.
In order to ensure equality of treatment with posted workers covered by Directive 96/71, the rights granted to intra-corporate transferees as regards working conditions are aligned on the rights already enjoyed by posted workers. This Article also states the areas where equal treatment must be recognised. Due to the temporary nature of the intra-corporate transfer, equal treatment with regard to education and vocational training, public housing and counselling services from employment services were considered irrelevant. Existing bilateral agreements continue to apply, in particular in the area of social security. In case of mobility between Member States, Regulation (EC) No 859/2003 applies as a rule. The residence permit granted to intra-corporate transferees enables them to work, under certain conditions, in all the entities belonging to the same group of undertakings.
This Article contains the derogations from Directive 2003/86 considered necessary in order to set up an attractive scheme for intra-corporate transferees and follows a different rationale from the Family Reunification Directive, which is a tool to foster integration of third-country nationals who could reasonably become permanent residents. In line with similar schemes already existing in the Member States and in other countries, it provides for immediate family reunification in the first State of residence. To achieve this aim, it also stipulates that possible national integration measures may be imposed only once the family members are on EU territory.
This Article provides for geographic mobility for intra-corporate transferees and enables them to work in different entities of the same transnational corporation located in different Member States and on their clients’ premises. Accordingly, a third-country national who has been admitted as an intra-corporate transferee may be allowed to carry out part of the assignment in an entity of the same group located in another Member State, on the basis of the first residence permit and of an additional document listing the entities of the group of undertakings in which he or she is authorised to work. The second Member State must be informed of the main conditions of this mobility. It may require a residence permit if the duration of work exceeds twelve months but may not require the intra-corporate transferee to leave its territory in order to submit applications.
The usual provisions are laid down on implementation, annual statistics and national contact points.