Update on French social security obligations

Earlier this year, the French government published Decree no2017-307 of 9 March 2017, which cemented the government’s view on the social security affiliation of seafarers residing in France and working on non-French flagged vessels. The Decree provided that all crewmembers employed on foreign-flagged vessels must be registered with French social security schemes if they reside in France, unless registered with another EU-member state or in another state that has a bilateral social security treaty with France.

Over the course of the year, industry associations as well as various companies and legal experts have been actively working to try and amend or reverse the Decree, which has been threatening to disrupt the yachting industry in the South of France.

“Once again France had published a new regulation without having studied the details of how the implementation would work in practice, and without having studied the dramatic consequences deriving from these new measures," comments Janet Xanthopoulos of Rosemont Yacht Services. "It has sparked a real wave of panic amongst the global yachting industry and resulted in several yachts leaving or threatening to leave France for more lenient countries."

In response to the uproar from the French yachting community, an update has now been issued on the Decree, which appears to be a step in a positive direction. Following a meeting with the key government advisors, representatives of the yachting industry have announced that Article 31 of the Social Security Finance law of 2016 (the legal basis for the Decree) would be modified to provide the option for seafarers to choose their own social security regime.

Andrew Charlier, partner at Ince & Co, explains that this choice could be between affiliation with ENIM (the French social security regime) or with another social security regime (either a private scheme or the Caisse des Français de l’Etranger). “This is a major step towards limiting the impact of the Decree on the yachting industry, and is due in no small part to the lobbying efforts and the legal action against the Decree led by industry actors,” Charlier explains.

The PYA has also issued a statement on the latest development and cautions that it does not mean that there will be no social security obligations for yacht crew in France. “The French government will still have to fulfil its obligations under MLC 2006,” the association advises. “So in the coming weeks, negotiations will be taking place to shape a new law, which will allow for both the better social protection of seafarers and the preservation of the local economic activity.”

Charlier adds that an official confirmation from the French Government is expected in the coming days or weeks and the modifications will be made as part of the Social Security Finance Law of 2017, which won't enter into force until early 2018.  While some organisations and media outlets are reporting a suspension of the Decree, Charlier asserts that this is not the case. “Until this modification is effective or the French Government announces otherwise, the Decree remains in force and is not suspended,” he warns.

Furthermore, there had been some caution regarding the interpretation of the Decree given by ENIM, where it indicated that only commercial vessels were implicated. This caution was warranted as ENIM has now amended its interpretation to state that private yachts, including yachts under temporary admission, as well as commercial yachts, are included within the scope of the Decree.

“The situation still needs to be closely monitored as it may well continue to have a major impact on the yachting industry,” concludes Xanthopoulos. “If the new social security solutions proposed by the council are less favourable than the ones accepted in other popular yachting jurisdictions, it may still lead to yachts avoiding French-national and French-resident crewmembers. The ECPY, along with other local yachting associations, will continue to fight until a suitable solution is found and voted in favour of the French yachting industry.”

Until further dialogue gets underway, there are still many unanswered questions. However, the fact that the French government is finally open to consultation from the yachting industry is positive news. SuperyachtNews will keep readers updated when any further information becomes available.

Profile links

Professional Yachting Association

Ince

Rosemont Yacht Services

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