The European Court of Justice ruled in the case C-631/17 SF v Inspecteur van de Belastingdienst  that in cases of seafarers who maintain their residence in their Member State of origin, whilst working for an employer established in a Member State on board a vessel flying the flag of a third State and travelling outside of the territory of the European Union, the applicable national legislation for social security matters is that of the Member State of residence of that person.
The Court of Justice came to this conclusion after considering the case of a Latvian citizen, residing in Latvia who worked as a steward for an undertaking established in the Netherlands, on board a vessel flying Bahamas flag for 6 months outside the territory of the EU.
In the abovementioned judgement, the Court of Justice repeated that the mere fact that an employee carries on his activities outside the European Union territory is not sufficient to establish that EU rules relating to the free movement for workers do not apply. ECJ considered that the employment relationship maintained a sufficiently close relationship with the EU territory and accordingly such case should fall within the scope of the regulation on the coordination of social security systems and, more particularly, Article 11(3)(e), so that the applicable national legislation is that of the Member State of residence of that person. It needs to be stressed at this point that, even though seaman’s professional activity during the period in question may not be regarded as having taken place in the territory of an EU Member State, there is a sufficiently close connection with EU area to apply.
The effect of this judgment could possibly mean that employers established in the territory of the EU should register and comply with the social security legislation of every EU country where their employees reside when the employees work in non-EU countries. It is also important to note that such ruling might find ground to all sectors and not only to the shipping industry.