Business travel compliance in Europe has continued to evolve in recent years and travel begins to steadily pick up

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Introduction

Business travel compliance in Europe has continued to evolve in recent years and as travel begins to steadily pick back up, businesses face unique challenges when navigating the patchwork of national legal frameworks in Europe while balancing the changing mobility landscape and novel ways of working. As companies navigate the complexity, it is imperative to develop Europe-wide strategies while ensuring compliance with local requirements. In this article, we focus on the recent developments in Europe and provide key takeaways to consider when reviewing your organization’s approach.

Schengen Zone: ETIAS, EES & Smart Borders

As part of the ‘Smart Borders’ initiative, the second half of 2022 will see additional requirements for non-EU nationals travelling to the Schengen zone, including those from the 60+ countries enjoying visa-free travel.

  • Preregistration online through the European Travel and Information Authorisation System (ETIAS) for visa-exempt nationals. The ETIAS is not a visa, but a pre-screening for travellers to the bloc, much like the US ESTA. ETIAS will be checked together with the travel documents by border guards when travellers cross an EU border. ETIAS-required travellers will include nationals of Australia, Brazil, Canada, Japan, the UK, and the USA. When applying for an ETIAS prior to visiting Europe, the traveller will be required to complete an online application form that requests personal data, contact details, passport information and answer basic security questions. ETIAS will likely not be mandatory until 2023, but travellers will have the option to register from the second half of 2022.
  • The Entry/Exit System (EES) will also impact all non-EU nationals (both short-stay visa holders and visa-exempt travellers) travelling from outside the EU into EU countries. The EES replaces the passport stamp at border checkpoints. Instead, travellers will register their name, travel document, biometric data, and place of entry and exit on the new digital system. The system is expected to improve security measures at borders of the Schengen Area, facilitate the detection of overstays in the Schengen Area, improve access to information for travellers entering Europe, and make documentation-checking at borders faster and more efficient. The data stored will be accessible to immigration authorities for purposes of border controls, visa issuance and other immigration matters.
    Key takeaway: Monitor your non-EU population and limit risks of overstaying in the Schengen zone and be prepared for the ETIAS roll-out. Start educating travellers with respect to these new requirements as well as non-compliance risks.

COVID-19

Travelling and COVID-19 entry requirements inevitably go hand in hand. Two years on from the start of the pandemic, we are still facing halted international mobility for business travel as well as short- and long-term travel assignments.

Sanitary measures remain in place and, despite (non-binding) recommendations by the European Commission, varying requirements exist across the bloc for entry and stay. Travel restrictions continue to change frequently, adding a layer of complexity and uncertainty to travel plans. Importantly, the following elements cannot be overlooked when planning business travel:

  • Vaccine certificates or other evidence of vaccinations have become the norm. The European Union has recognised a number of vaccines and each country has steadily published the vaccines that will be accepted for entry as well as the evidence required to prove vaccination status.
  • PCR/antigen testing and quarantine requirements particularly affect travellers coming from outside the EU and unvaccinated individuals. Again, it is important to monitor at national level as each EU country has its own set of measures.
  • Passenger Locator Forms (PLF) and Other Declarations: most EU countries have PLFs to be completed prior to travel, to be produced upon request during travel. In addition, certain countries require additional declaration based on the reason for travel, vaccination status and other reasons (e.g. France’s declaration on COVID symptoms).
  • Travel bans, while less frequent than at the start of the pandemic, they persist nonetheless. These measures are particularly disruptive as they typically come into force on short notice, leaving little room to minimise disruption. A good example is the travel ban on several southern African countries at the end of 2021.
  • These travellers face enhanced scrutiny and must be additionally conscious of the elements mentioned above.
  • Norm vs practice, border authorities may have a stricter or more flexible approach in practice adding a complexity layer around the legal certainty of business travel in the COVID context.

Key takeaway: Stay informed and be aware of last-minute changes. Rely on trustworthy sources such as government websites and be conscious of ad-hoc verbal or written assurances from consular officers/airlines that differ from official government advice. Check Fragomen’s COVID-19 microsite which includes comprehensive and up to date travel and entry requirements as well as each country’s current operational status.

Brexit

Amid the travel mayhem caused by the COVID-19 pandemic the UK formally left the European Union on December 31, 2020. Thus, as of January 1, 2021, British nationals no longer have free movement rights in the EU. While a trade and cooperation agreement has been concluded, it has yet to be fully implemented in all EU member states. In practice, therefore, British nationals are now considered third country nationals, and should expect to remain in this category for the foreseeable future.

There is increased scrutiny of British nationals’ overstaying their Schengen zone allowance as well as their purpose of travel. While British nationals do not require an entry visa to travel to Europe for business or tourism, they are subject to an allowance of maximum 90 days in any 180-day rolling period within the Schengen zone. If the activities to be performed in Europe go beyond permissible business visit activities, and no other applicable exemptions exist, a work permit is required. Each country sets its own rules in this regard, therefore business travel to one country may be permissible, while the same activities in another country could require a work permit.

Other practical considerations for a smooth immigration experience for British nationals post-Brexit:

  • Valid passports with at least three months from the intended departure date.
  • Health insurance coverage is recommended for the duration of stay or transit in the Schengen zone – EHIC cards are no longer valid post-Brexit
  • Return travel plans evidenced by a round trip ticket or proof of sufficient funds to purchase a return ticket
  • Invitation letter from the host country/entity is always a best-practice recommendation, confirming the nature and duration of the travel
  • Common Travel Area: note that travel between the Republic of Ireland and the UK remains unaffected

Key takeaways: Be aware of the new travel realities for British nationals. Ensure your British employee population is educated on their status and requirements when travelling to Europe. Review the activities that your British nationals regularly undertake in Europe with your immigration advisors to understand any risks that may arise, or any opportunities for work permit exemptions. Remember also to consider the inverse, travel into the UK for EU nationals faces many of the same complexities.

Remote work

Another post-pandemic reality, remote work involves individuals working full time for an employer in a country other than their country of employment – sometimes referred to as the ‘digital nomad’ movement. Unlike in other regions and countries, remote work remains largely unregulated in Europe, given that these types of employment arrangement fall within the tenant of free movement across the bloc.

As it relates to non-EU nationals, nine European countries now offer Digital Nomad visa types: Croatia, Estonia, Georgia, Germany (limited nationality list), Greece, Hungary, Iceland, Romania, and Malta. These programs typically require substantial funds, no access to the local labour market, no additional intra-EU mobility rights, and limit stays to six to 12 months. While this is perfectly suited for digital nomads, this arrangement does not suit remote workers seeking a more permanent arrangement, as only Greece and Malta allow stays beyond 12 months, and none of the programs lead to permanent residency.

The greater risk for intra-EU remote work lies in the areas of social security and taxation, as local tax may be applicable after a certain threshold depending on the taxation agreement between the home and host country.
Key takeaway: Many companies are developing remote work policies as an incentive for employees and new hires. The overriding principle is to remain informed, not just on where employees are and where they are going, but also the rules when they get there. Ensure that immigration, social security, posted worker and tax risks are part of the conversation when these policies are being developed.

Posted workers and other compliance considerations

Businesses are frustrated with the complexity of posted worker compliance in practice; navigating 27+ countries’ unique posted worker processes is often disproportionate to the time these employees spend in-country. In some cases, companies refrain from notifying authorities, afraid of being brought on the authorities’ radar and triggering inspections, even though an attempt at compliance would be made in good faith.
Labour inspections are typically intrusive, and penalties can be hefty – ranging from large fines (up to 30,000 EUR in some countries) to criminal liability for home and host company (including imprisonment).
Companies cannot avoid compliance, but help is on the horizon. These rules will not disappear, but the landscape for provision of services has changed since the rules were adopted. For posted worker rules in particular, the European Commission brought infringement proceedings against 24 member states whose implementation of posted worker rules were found to be disproportionate to the aims of the legislation. In addition, the European Commission is developing a voluntary, common posted worker declaration form in consultation with member states aimed at reducing the administrative burden.

Aside from posted worker rules, businesses must consider social security, labour law and tax implications for business travel. Changes in work or residence location could cause a social security shift and any extended period of stay could inadvertently trigger establishment of tax residence for the home employer in certain EU countries. Despite some harmonisation at EU level, these aspects require country-by-country compliance checking.

Key takeaway: Develop a holistic compliance program. To remain compliant in Europe, these various connected compliance aspects cannot be considered in isolation.

Conclusion

The pivotal takeaway is to be prepared for an increase in complexity. The pandemic has accelerated a pre-pandemic trend of requirements and enforcement addressed at short-term travellers, while at the same time shielding businesses from the full ramifications of Brexit. Having a robust business travel program can enable businesses to minimise disruption and potentially use the recent and forthcoming changes to their benefit, possibly even allowing for compliant intra-EU mobility as a perk for talent attraction and retention.
Partnerships with trusted advisors are critical to help you navigate these rough seas. The experts of Fragomen’s Mobility Solutions Practice are on hand to provide strategic solutions for short-term travel into and within Europe, incorporating immigration, posted worker, and social security compliance. Our tool Nomadic allows for a tech-enabled solution to assess, action, and track risks across these areas, and features online submission of posted worker notifications, among other features. This integrated approach allows businesses to minimise the administrative burden and maximise cost savings, while ensuring full compliance for employees from day one in the European Union.

anasofia.walsh@fragomen.com

jack.stokes@gonomadic.com

aghimis@fragomen.com

 

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