from ABIL Global Immigration Update

There is a renewed focus on compliance issues.

There has been an increasing focus on compliance issues in Belgium, such as in the field of cross-border employment. For example, the Belgian government has begun an initiative against fraud and abuse regarding social security in the context of international mobility.

European regulations have set rules to determine what legislation applies in a particular situation. For example, an employee who is posted by his German employer to Belgium will, under certain conditions, remain subject to German social security; he will receive an "A-1" document from the German social security authorities as proof.

At present, as confirmed by European case law, European Union Member States' courts must accept an A-1 document, even if it is subject to discussion. Only the Member State that has issued the document can withdraw it. For instance, if there were discussion about the real nature of the posting of the German employee to Belgium, a Belgian court must still accept the German A-1 document as long as it has not been withdrawn.

A new rule effective January 10, 2013, entitles Belgian courts to set aside the European coordination rules in the event of "abuse," which is defined as the incorrect application of the European coordination rules to try to avoid being subject to Belgian social security. The Belgian courts could, in the event of such abuse, decide that Belgian social security applies anyway. For example, if the Belgian court believes that there has been fraud or abuse of the European coordination rules and that the German employee is not posted to Belgium but in fact works under the authority of the Belgian third party, it can set aside the German A-1 document.

This new rule is controversial, especially in light of European law.

from ABIL Global Immigration Update

There are new conditions for eligibility for two types of citizenship and a renewed focus on compliance issues.

The Nationality Act changed drastically effective January 1, 2013. It has become more difficult to obtain Belgian citizenship on the basis of residence, and requests for Belgian citizenship can no longer be filed from abroad. These changes do not apply, in general, to foreigners to whom Belgian citizenship can be attributed, for example, on the basis of their parents' nationality or birth in Belgium. The "old" rules with regard to eligibility and processing continue to apply to applications filed before January 1, 2013.

The following summarizes the new conditions for eligibility for two procedures for obtaining Belgian citizenship:

Naturalization

• The applicant must have an authorized stay in Belgium at the time of the filing of the application. This means that the applicant must be entitled to a residence permit valid for indefinite term or to permanent residence;
• The applicant must be at least 18 years old at the time of the application;
• The applicant must have had, or can offer, exceptional merits for Belgium on scientific, sport, or socio-cultural levels and can thus contribute to the international prestige of Belgium. The merits are now well-defined in the Nationality Act. For example, an athlete can be eligible if he or she meets the international or Belgian selection criteria for a European championship, a world championship or the Olympics, or if he or she is deemed, in the opinion of the relevant sports federation, to provide potential added value for Belgium for qualifiers or the final tournament of a European championship, a world championship or the Olympics;
• The applicant must explain and justify why he or she cannot obtain Belgian citizenship through a declaration of nationality.

Declaration of Nationality

This is possible at the earliest after five years of legal stay in Belgium, combined with the knowledge of one of the three national languages of Belgium, and proof of social integration and economic participation. The Nationality Act includes specific criteria for this social integration and economic participation.

Lapsed/Revoked Citizenship

Under the new Nationality Act, the Belgian court can declare citizenship lapsed/revoked in the event of certain criminal convictions or if citizenship was obtained through a marriage that has been annulled as a fake marriage. Contrary to the other new rules, these new rules on loss/lapse/revocation of citizenship are immediately applicable on pending applications as of December 24, 2012.

from ABIL Global Immigration Update

The major change in 2012 was the implementation of the European Union (EU) Blue Card Directive, effective September 10, 2012.

The Blue Card is atypical for Belgium, as it is both a work permit (issued by the regions) and residence permit (issued by the federal authorities). This is reflected in the processing of a Blue Card application:

• An employer who wishes to employ a highly qualified non-EU/European Economic Area foreign employee can apply for temporary work authorization with the regional authorities.
• The second step is that the foreign employee applies for a Blue Card, which is a residence permit, with the federal authorities.
• As a Blue Card holder, the foreign employee may work in Belgium without a work permit. He or she can invoke a work permit exemption.

The following conditions must be met:

• The employer and the foreign employee must have entered into an employment contract of indefinite duration or a fixed-term employment contract of a duration of at least one year.
• The foreign employee must be entitled to an annual gross salary of at least €49,995 (amount for 2013).
• The employee must have a degree from a higher education institution, awarded for an education program with a duration of at least three years.

The legal texts implementing the Blue Card are inconsistent on some points: it is not yet entirely clear how administrative authorities will interpret the rules governing the Blue Card. It is clear, however, that the Blue Card will exist alongside, without replacing, the already existing "fast-track" work permit for highly skilled personnel. Belgium does not apply numerical limits.

A potential future change relates to the transfer of the legislative power regarding work permits from the federal level to the regions. At present, the regions (Brussels, Flanders, and Wallonia) process work permits on the basis of federal legislation. The coalition agreement of the federal government mentions the transfer of legislative authority regarding economic migration to the regions. Negotiations are rumored to be starting shortly, which could lead to different rules for Brussels, Flanders, and Wallonia.

from ABIL Global Immigration Update

Belgium is working on implementation of the European Union (EU) Blue Card directive; there is an increasing focus on compliance; and a potential future change relates to the transfer of legislative power regarding work permits from the federal level to the regions.

Work Permits; Implementation of the EU Blue Card Directive

The Belgian work permit system is a very business-friendly model in practice. The "regular" work permit, with a resident labor test, has become very rare in the corporate immigration context. "Fast-track" work permits, without a resident labor test, can be obtained quite fast, within two to three weeks after the date of filing of the application.

The economic recession has not led to drastic changes to the Belgian work permit system. However, one protective measure, regarding Bulgarian and Romanian nationals, should be mentioned:

• In principle, European Union (EU) nationals may work in Belgium without work permits, on the basis of the right of free movement of workers.
• For Bulgaria and Romania, which joined the EU on January 1, 2007, restrictions on this right of free movement of workers were maintained during an initial transition term until the end of 2008. That was prolonged for another three years, until December 31, 2011. The Belgian government has decided to continue the restrictions until December 31, 2013. As a rationale for this decision, the government explicitly referred to the expected economic recession in 2012/2013 as well as to similar decisions of neighboring countries to maintain the restrictions.

In other developments, the Belgian Parliament and the Minister of Employment are currently working on implementation of the EU Blue Card Directive.

The available texts indicate that the Blue Card will exist alongside the current fast-track work permit B for highly skilled employees. The salary threshold for a Blue Card in 2012 will probably be €49,995, which is higher than the current threshold for a highly skilled work permit B (€37,721 for 2012).

The Belgian authorities will probably choose not to take professional experience into account to prove "higher professional qualifications," but a higher education will be required, on condition that the studies needed to acquire it lasted at least three years. Belgium will probably not apply numerical limits.

Focus on Compliance

New Code on Labour and Social Security Criminal Law. A new Code on Labour and Social Security Criminal Law took effect on July 1, 2011. It mainly codifies existing compliance rules with regard to labor and social security law-related issues, including employment of foreigners, but also creates new compliance rules.

Unauthorized/illegal employment of a foreigner who is not entitled to live in Belgium more than three months is among the infringements that are considered very serious ("type 4" infringements).

The potential penalties for such infringement include a jail term of six months to three years and/or a criminal fine between €3,600 and €36,000 per employee, with a maximum of €3,600,000 (€36,000 x 100). Furthermore, the employer may be prohibited from operating the business for a limited time, between one month and three years. The court may also order closure of the company for the same duration.

The same two accompanying penalties (prohibition from operating the business and closure of the company for a limited time, between one month and three years) may be imposed upon "HR advisors," largely defined as professionals providing advice or help to one or more employers or employees with regard to the carrying out of obligations as sanctioned by the Code, either for their own account or within an entity. According to some comments to the Code, HR consultants and payroll personnel are included in this category, but probably not lawyers or notary publics (although they may risk being an accomplice to an infringement). The courts can only impose these two accompanying penalties if they are deemed necessary to stop an infringement or to avoid repeat offending, provided that they are in proportion with overall socio-economic interests.

If the Public Prosecutor determines that this infringement does not justify criminal prosecution, an administrative fine may be imposed, ranging between €1,800 and €18,000 per employee, with a maximum of €1,800,000 (€18,000 x 100).

The Belgian authorities are working on implementation of the EU Illegals Employment Directive. A first proposal of an Act has been prepared but the text is not yet publicly available. The new Act may include the following:

• The basic principle is that employers cannot employ a person who is not an EU citizen, who does not enjoy the right of free movement, and who is present on the Belgian territory, without that person meeting the requirements for stay or residence in Belgium. The employer must check the residence documents of the potential employee before employment. Furthermore, the employer must keep a copy of these documents available for inspection and notify the competent authorities of the start of the employment.
• The new Act provides effective, proportionate, and dissuasive sanctions against employers who employ unauthorized third-country nationals in Belgium. These include general financial and criminal sanctions. The employer may also be liable to pay any outstanding remuneration to the employee. Finally, the employer may be required to pay taxes and social security contributions to Belgium.
• If the infringing employer is a direct subcontractor, the contractor will also be severally liable, unless the subcontractor states in writing that it does not employ unauthorized employees. If the infringing employer is an indirect subcontractor, the contractor can only be severally liable after notification by the social inspection services and only up to the salary as of the date of such notification.
• Employees may exercise their rights before the court, as may representative organizations for employers or employees and the Centre for Equal Opportunities and Opposition to Racism (an independent government agency that fights discrimination and racism and that assists victims).

Draft Act on increased coordination of inspection of illegal employment and fraud. On June 22, 2012, the Belgian federal government agreed to a draft Act that approves a cooperation agreement between the inspection departments on federal (Belgium) and regional (Brussels, Flanders, and Wallonia) levels. According to a press release on June 23, 2012, the aim is to enhance the cooperation between the inspection departments at the different levels "primarily in order to inspect the employment of foreign employees."

Potential Change: Transfer of Legislative Power From Federal to Regional Level

A potential future change relates to the transfer of legislative power regarding work permits from the federal level to the regions. At present the regions (Brussels, Flanders, and Wallonia) process work permits on the basis of federal legislation. The coalition agreement of the federal government and the general policy statement of the federal Minister of Employment both mention the transfer of legislative authority regarding economic migration to the regions.

No specific steps have been taken yet to initiate this process. It is not yet clear whether, when, and to what extent the transfer of legislative power will be implemented. This could lead to different rules for Brussels, Flanders, and Wallonia.