By Ted L. Badoux - Managing Partner of Everaert Advocaten in Amsterdam, the Netherlands.
Twenty-six member states of the European Union have committed themselves “to bring into force the laws, regulations and administrative provisions necessary to comply” with Directive 2014/66/EC of 15 May 2014 on the conditions of entry and residence of third country nationals in the framework of an intra-corporate transfer. They must communicate the text of their measures to the European Commission in Brussels, ultimately by 29 November 2016. Failing timely implementation into national law, the articles of the ICT Directive conferring rights to applicants will then have a direct and binding effect.
Once again Denmark, Ireland and the UK have opted out of an important framework of EU law on the labour migration of third-country nationals. In this article I want to briefly capture what the Netherlands as one of the signing member states has not taken a pass on.
Twenty-six member states of the European Union have committed themselves “to bring into force the laws, regulations and administrative provisions necessary to comply” with Directive 2014/66/EC of 15 May 2014 on the conditions of entry and residence of third country nationals in the framework of an intra-corporate transfer. They must communicate the text of their measures to the European Commission in Brussels, ultimately by 29 November 2016. Failing timely implementation into national law, the articles of the ICT Directive conferring rights to applicants will then have a direct and binding effect.
Once again Denmark, Ireland and the UK have opted out of an important framework of EU law on the labour migration of third-country nationals. In this article I want to briefly capture what the Netherlands as one of the signing member states has not taken a pass on.
The Directive introduces a single permit procedure providing legal stay and work authorization for employment in a first and in a subsequent member state by a third country national who is transferred for employment within a group of companies which has a corporate establishment both in the European Union and elsewhere in the world. Subject to the national permit conditions transposed from the Directive, corporate management, technical specialists and employee trainees will be entitled to work in one or several EU-member states for the parent company or one of its establishments. The maximum duration of the ICT permit is three years for managers and technical specialists, and 1 year for employee trainees.
The ICT directive does not cover ICT transfers of up to 90 days. There is no harmonization by EU-law for just short term intra–corporate business activities. The Directive leaves open the wide range of existing national work permits and the specific and generic waivers for incidental work in the member states which have signed up to the Directive; the business meetings, the installation and implementation of IT, repair and maintenance of hard ware products, training on the job, bubbling-in assignments to name a few, fall out of the scope of the Directive if those activities are limited to less than 90 days in any period of 180 days.
Article 2 par. 3 of the ICT Directive explicitly grants that the member states continue to issue residence permits to third-country nationals “other than the intra-corporate transferee permit covered by this Directive, for any purpose of employment for third-country nationals who fall outside the scope of this Directive”. Clearly, this means that the committed member states cannot continue applying an ICT scheme of their own with more favourable conditions and less requirements as instructed in the Directive. The ICT Directive does not, as in the Blue Card Directive, contain a clause of escape for member states who - within the scope of the Directive - want to continue a more beneficial and flexible national ICT scheme.
Surely the Directive creates a level playing field for ICT migration in Europe. However, in article 4 the Directive recognizes that the Union and its member states may have to comply with the more favourable provisions in bilateral and multilateral agreements that are part of the law of the Union; in particular, the stand-still clauses in the association treaties with Turkey and Croatia may prevent that a member state exercises a stricter ICT policy under the Directive as regards the companies and the nationals from those countries.
The more favourable provisions in bilateral and multilateral agreements that are part of the law of a singular member state may also override the ICT conditions of the new Directive. Bilaterally, you may think of the many uniformly formatted Friendship Treaties which the United States has concluded with many European states in the context of the Marshall Plan after WO II, but also of establishment treaties with Switzerland and trade agreements with Japan. Multilaterally, the European Commission had to mind the most favoured nation provisions for intra-concern services in the General Agreement on Trade in Services (GATS) of the WTO and consider that Norway, Iceland and Switzerland are bound to EU law development in their EEA relationship with the European Union. Taking account of these treaties and agreements, one may conclude that the harmonizing effect of the ICT migration in Europe from the new Directive may be relative. This may particularly be relevant for US companies and Japanese nationals who by treaty privilege enjoy most favourable treatment in labour migration to the Netherlands. US companies with a group establishment in the Netherlands may benefit both ways, from the best in the Directive, think of easy access and mobility on the European continent, and the best in the Dutch national policies respecting the most lenient qualifications for transferees. Japanese transferees must continue to be treated in The Netherlands as quasi EU-citizens for in-country employment while at any point in time of their assignment can be transferred on to another EU member state to exercise mobility rights under the Directive.
Under the Directive, the Dutch government agencies IND and UWV may have to give in on an otherwise effective and flexible national ICT scheme of salary based adjudication applying the same thresholds as in the Dutch program for highly skilled migrants HSMP, where the ICT Directive only requires that the ICT salaries are at market level. Lower labour standards, thereby distorting competition, cannot be countered by setting exclusive salary thresholds; companies applying for ICT work permits can only be required to demonstrate as a ground for admission that the remuneration granted to the intra-corporate transferee is not less favourable than the remuneration granted to nationals occupying comparable positions. The Dutch officials at the implementation drawing board are considering marking the annual HSMP salary thresholds as a remuneration at market level for an ICT permit.
Other mild qualifications and document requirements, no previous job record, an academic degree not being required, these by international comparison lenient conditions must be replaced by the far stricter criteria for admission laid down in the Directive, comprising inter alia that:
Granted, the Dutch ICT policy includes a € 50 million global turnover criterion, but the Dutch government will happily skip it as it can’t be upheld for American companies, who are still number one in using the Dutch ICT scheme.
Another issue for the Dutch implementation of the ICT Directive is the single permit requirement. The national ICT permit process is still double tracked and not compliant with the Single Permit Directive 2011/66/EU which was adopted in May 2014; work authorization and legal residency are decided in separate applications by two separate government agencies and result in the issuance of two separate documents. The government agencies IND and UWV will have to bring these tracks together over the next months.
To comply with the Directive, the Dutch ICT scheme will have to improve the labour market access of the family members of the transferee; the Directive confers the right to be employed or self-employed in the host member state throughout the duration of the transfer. This is not the case now in The Netherlands. These rights are still conditional to a regular work permit including job market validation must be applied for by the employer of the spouse, partner or children of the transferee. For work as self-employed a separate permit will have to be applied which will be adjudicated on the basis of a points system. So in this respect, The ICT Directive will really improve the Dutch ICT practice.
The grand novelty for Europe is the innovative scheme for intra-EU mobility. Once the ICT Directive is implemented by the member states, third-country nationals with an ICT permit issued in any member state of first residence, will be exempted from the Schengen visa obligations. They can enter, stay and work in their assigned ICT role in one or several second member states, i.e. other than the one to which they were initially admitted with little or no interruption to their assignments. The conditions for long-term mobility are stricter than those for short-term mobility: long-term being more, short-term being less than 90 days in any 180 day period.
The intra-EU mobility scheme signifies a major innovation compared to the existing national schemes which do not allow intra-corporate transferees to work in subsidiaries established in another member state. However, the success of the intra-EU mobility scheme of will greatly depend on the willingness and effort of the member states to organize an effective intra-mobility information system and robust enforcement to warrant against abuse, just as the ICT Directive has stipulated. As the European refugee crises deepens and again closes Schengen borders in 2016, the future of this new element of free movement by third-country nationals in Europe could be brighter.
The ICT directive does not cover ICT transfers of up to 90 days. There is no harmonization by EU-law for just short term intra–corporate business activities. The Directive leaves open the wide range of existing national work permits and the specific and generic waivers for incidental work in the member states which have signed up to the Directive; the business meetings, the installation and implementation of IT, repair and maintenance of hard ware products, training on the job, bubbling-in assignments to name a few, fall out of the scope of the Directive if those activities are limited to less than 90 days in any period of 180 days.
Article 2 par. 3 of the ICT Directive explicitly grants that the member states continue to issue residence permits to third-country nationals “other than the intra-corporate transferee permit covered by this Directive, for any purpose of employment for third-country nationals who fall outside the scope of this Directive”. Clearly, this means that the committed member states cannot continue applying an ICT scheme of their own with more favourable conditions and less requirements as instructed in the Directive. The ICT Directive does not, as in the Blue Card Directive, contain a clause of escape for member states who - within the scope of the Directive - want to continue a more beneficial and flexible national ICT scheme.
Surely the Directive creates a level playing field for ICT migration in Europe. However, in article 4 the Directive recognizes that the Union and its member states may have to comply with the more favourable provisions in bilateral and multilateral agreements that are part of the law of the Union; in particular, the stand-still clauses in the association treaties with Turkey and Croatia may prevent that a member state exercises a stricter ICT policy under the Directive as regards the companies and the nationals from those countries.
The more favourable provisions in bilateral and multilateral agreements that are part of the law of a singular member state may also override the ICT conditions of the new Directive. Bilaterally, you may think of the many uniformly formatted Friendship Treaties which the United States has concluded with many European states in the context of the Marshall Plan after WO II, but also of establishment treaties with Switzerland and trade agreements with Japan. Multilaterally, the European Commission had to mind the most favoured nation provisions for intra-concern services in the General Agreement on Trade in Services (GATS) of the WTO and consider that Norway, Iceland and Switzerland are bound to EU law development in their EEA relationship with the European Union. Taking account of these treaties and agreements, one may conclude that the harmonizing effect of the ICT migration in Europe from the new Directive may be relative. This may particularly be relevant for US companies and Japanese nationals who by treaty privilege enjoy most favourable treatment in labour migration to the Netherlands. US companies with a group establishment in the Netherlands may benefit both ways, from the best in the Directive, think of easy access and mobility on the European continent, and the best in the Dutch national policies respecting the most lenient qualifications for transferees. Japanese transferees must continue to be treated in The Netherlands as quasi EU-citizens for in-country employment while at any point in time of their assignment can be transferred on to another EU member state to exercise mobility rights under the Directive.
Under the Directive, the Dutch government agencies IND and UWV may have to give in on an otherwise effective and flexible national ICT scheme of salary based adjudication applying the same thresholds as in the Dutch program for highly skilled migrants HSMP, where the ICT Directive only requires that the ICT salaries are at market level. Lower labour standards, thereby distorting competition, cannot be countered by setting exclusive salary thresholds; companies applying for ICT work permits can only be required to demonstrate as a ground for admission that the remuneration granted to the intra-corporate transferee is not less favourable than the remuneration granted to nationals occupying comparable positions. The Dutch officials at the implementation drawing board are considering marking the annual HSMP salary thresholds as a remuneration at market level for an ICT permit.
Other mild qualifications and document requirements, no previous job record, an academic degree not being required, these by international comparison lenient conditions must be replaced by the far stricter criteria for admission laid down in the Directive, comprising inter alia that:
- The new ICT permit can be granted for a maximum of three years for managers and specialists; for employee trainees the maximum term is one year only;
- Managers and specialists must have worked at least three up to 12 uninterrupted months for the multinational company immediately preceding their transfer; for trainee employees this period is 3 to 6 uninterrupted months;
- Evidence of professional qualifications and experience needed in the host entity must be provided and the trainee employee has a university degree
- Third-country nationals already residing in a member state are not eligible for an ICT permit under the ICT Directive; as a comment I note here, that they may still be transferred as the holder of Blue Card or a national permit issued under the conditions of the Long-Term Residence Directive 2003/109;
- The parent company must be established outside the European Union; recently raised with the European Commission as an important implementation issue.
Granted, the Dutch ICT policy includes a € 50 million global turnover criterion, but the Dutch government will happily skip it as it can’t be upheld for American companies, who are still number one in using the Dutch ICT scheme.
Another issue for the Dutch implementation of the ICT Directive is the single permit requirement. The national ICT permit process is still double tracked and not compliant with the Single Permit Directive 2011/66/EU which was adopted in May 2014; work authorization and legal residency are decided in separate applications by two separate government agencies and result in the issuance of two separate documents. The government agencies IND and UWV will have to bring these tracks together over the next months.
To comply with the Directive, the Dutch ICT scheme will have to improve the labour market access of the family members of the transferee; the Directive confers the right to be employed or self-employed in the host member state throughout the duration of the transfer. This is not the case now in The Netherlands. These rights are still conditional to a regular work permit including job market validation must be applied for by the employer of the spouse, partner or children of the transferee. For work as self-employed a separate permit will have to be applied which will be adjudicated on the basis of a points system. So in this respect, The ICT Directive will really improve the Dutch ICT practice.
The grand novelty for Europe is the innovative scheme for intra-EU mobility. Once the ICT Directive is implemented by the member states, third-country nationals with an ICT permit issued in any member state of first residence, will be exempted from the Schengen visa obligations. They can enter, stay and work in their assigned ICT role in one or several second member states, i.e. other than the one to which they were initially admitted with little or no interruption to their assignments. The conditions for long-term mobility are stricter than those for short-term mobility: long-term being more, short-term being less than 90 days in any 180 day period.
The intra-EU mobility scheme signifies a major innovation compared to the existing national schemes which do not allow intra-corporate transferees to work in subsidiaries established in another member state. However, the success of the intra-EU mobility scheme of will greatly depend on the willingness and effort of the member states to organize an effective intra-mobility information system and robust enforcement to warrant against abuse, just as the ICT Directive has stipulated. As the European refugee crises deepens and again closes Schengen borders in 2016, the future of this new element of free movement by third-country nationals in Europe could be brighter.
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