Countries-of-convenience: Stop tax evasion and social dumping

The term “flag-of-convenience” refers to the practice within the maritime sector to register a ship in a country which is not the country where the ship is owned or where it operates, in order to reduce labour costs and/or escape regulatory control by the State in which the vessel is owned or where it operates. Essentially, if a ship-owner does not like the rules in one country, it abandons that country’s flag and chooses to fly the flag of a country where the regulations are much weaker. 

This practice of choosing the land of registration of a ship-company to save social costs – thus depriving workers of wages and social contributions – is now spreading to other sectors such as construction, road transport and the meat industry. This is carried out by a company registered in one Member State, registering a more or less fake (or letter-box) subsidiary company in another Member State, which then functions as the ‘employer’ in that country. Workers might then be recruited in a third Member States and posted to work in yet another Member State!  This practice is unacceptable – it deprives workers of the wages and social rights they are entitled to and exposes them to health and safety hazards. It also deprives Member States of tax income and distorts the market.



16 October 2013 from 15:00 to 18:00
European Parliament in Brussels - Room A3G3
Interpretation: EN, FR, DE, ES, IT
15:00 Welcome address
MEP Stephen HUGHES, S&D Group Vice President

15:10 Introductory remarks
MEP Mojca KLEVA KEKUS, European Parliament rapporteur on "Fight against Tax Fraud, Tax Evasion and Tax Havens"

In the Chair
MEP Alejandro CERCAS, S&D Coordinator in the European Parliament Committee on Employment and Social Affairs

15:30 Keynote speeches
Eduardo CHAGAS, Secretary General, European Transport Federation -ETF:
"Modern slavery in modern transport?"
Anna-Lena NORBERG, Investigating journalist and author:
"Social dumping - methods of cheating"
Sam HÄGGLUND, Secretary General, European Federation of Building and Woodworkers - EFBWW:
"Cheap labour as business model in the EU - lacunae of rights and the spread of social dumping and precarious jobs"
Conny REUTER, Secretary General, Solidar:
"The social cost of fiscal competition in Europe – who is paying
the bill?"

17:00 Debate with questions and answers

17:50 Concluding remarks


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Related documents 
Programme : Countries-of-convenience: Stop tax evasion and social dumping