What Does Comprehensive Economic and Trade Agreement (CETA) Mean for Mobility? The CETA Between Canada and the European Union Explained
On September 21, 2017, a new wide-range trade deal between the European Union’s 28 countries and Canada will provisionally apply. While officially a provisional agreement until every EU member state approves the agreement, most of CETA already applies.
CETA’s stated objectives are to make it easier for party countries to:
- Boost trade, generate growth and jobs
- Reduce customs tariffs and other barriers to trade between the EU and Canada and achieve this in a sustainable way that, for example, protects international workers’ rights and the environment
From a relocation and household goods shipment perspective, two key provisions in CETA stand out. These relate to the temporary movement of people with EU and Canadian citizenship in skilled roles and customs facilitation.
For moves that CETA may facilitate, key points and the potential for mobility program enhancements and efficiencies are outlined below:
CETA and the Movement of People
CETA aims to make it easier for skilled employees and contracted staff to work on either side of the North Atlantic in order to help companies manage their overseas operations.
Under CETA, people in certain categories with particular skills can work temporarily in party countries. The new, extended arrangements mean the process of obtaining a work permit should be quicker, more predictable, more transparent and less expensive. For example, certain skilled categories will be free from economic needs tests (chapter 10:1).
As the Government of Canada explains, the agreement should benefit:
- Investors who are supervisors or executives and seeking to establish, develop or administer the operation of an investment
- Intra-corporate transferees who are senior personnel, specialists or graduate trainees being temporarily transferred within a company
- Companies seeking to temporarily send employees as contractual services suppliers to fulfil contracts
- Self-employed, independent professionals seeking to temporarily enter to supply a service in order to fulfill a contract (chapter 10:1)
The agreement’s exact terms and definitions are covered in chapter 10 of the 30-chapter agreement, and briefly outlined below. For precise interpretation or clarification, please contact your local SIRVA® representative or read the full text here.
CETA: Chapter 10: “Temporary Entry and Stay of Natural Persons for Business Purposes”
Aiming to offer legal certainty for trained workers who temporarily enter the EU or Canada to do business, Chapter 10 of CETA describes the:
- Types of roles and duties covered
- Sectors in which they can operate
- The maximum length of their stay
- How EU professionals will enjoy equal treatment in Canada and vice versa
The agreement defines a "natural person" as someone “who is a citizen or permanent resident of Canada” (chapter 8:1). For the European Union, a natural person has the “nationality of one of the EU member states according to their respective laws.”
Which Roles Are Covered Under CETA?
The roles covered in the treaty and outlined in the definitions fall under “key personnel” (chapter 10:1). These include: skilled contractual services suppliers, intra-company personnel, senior managers, specialists, graduate trainees and business visitors.
Contractual services suppliers: (chapter 10:8)
If an enterprise in one CETA country has a bona fide service contract in another CETA country, but no establishment there, the agreement provides for the temporary presence of certain employees in order to fulfill the contract.
Independent professionals: (chapter 10:8)
Similar to contractual services suppliers above, this is for certain people supplying a service and established as self-employed who have concluded a bona fide contract to supply a service that requires the person’s temporary presence.
Key business personnel: (chapter 10:1)
This section defines 1) business visitors for investment purposes, 2) investors or 3) intra-corporate transferees.
- Business visitors for investment purposes: people working in a managerial or specialist position who are responsible for setting up an enterprise, but who do not engage in direct transactions with the general public and do not receive remuneration from a source located within the territory of the host.
- Investors: people who establish, develop or administer the operation of an investment in a supervisory or executive capacity, and to the people or the enterprise employing these people has committed, or is in the process of committing, a substantial amount of capital
- Intra-corporate transferees: people employed by or partners in an enterprise for at least one year who are temporarily transferred to an enterprise, which may be a subsidiary, branch, or head company of the enterprise. This person must belong to one of the following categories:
Senior personnel means people working in senior positions within an enterprise who:
- Primarily direct the management of the enterprise or direct the enterprise, or a department or sub-division of the enterprise; and
- Exercise wide latitude in decision making, which may include having the authority to personally recruit and dismiss or to take other personnel actions (such as promotion or leave authorizations), and
- Receive only general supervision or direction principally from higher level executives, the board of directors, or stockholders of the business or their equivalent; or
- Supervise and control the work of other supervisory, professional or managerial employees and exercise discretionary authority over day-to-day operations; or
Specialists means people working in an enterprise who possess:
- Uncommon knowledge of the enterprise's products or services and its application in international markets; or
- As advanced level of expertise or knowledge of the enterprise's processes and procedures such as its production, research equipment, techniques or management.
In assessing such expertise or knowledge, employers can consider abilities that are unusual and different from those generally found in a particular industry and that cannot be easily transferred to another person in the short-term. Those abilities would have been obtained through specific academic qualifications or extensive experience with the enterprise; or
Graduate trainees who:
- Posses a university degree; and
- Are temporarily transferred to an enterprise in the territory of the other party for career development purposes, or to obtain training in business techniques or methods; and
People for business purposes means key personnel, contractual services suppliers, independent professionals or short-term business visitors.
Length of Stay for Key Personnel
- The maximum length of stay for intra-corporate transferees (article 10.7: point 5) (specialists and senior personnel) is three years, or the length of the contract if less than three years. An extension of up to 18 months at the discretion of the party granting the temporary stay is possible.
- For graduate trainees on intra-corporate moves, the maximum stay is one year (article 10.7: point 5), or for the duration of the contract if that is the shorter period.
- Investors are permitted to stay for one year (article 10.7: point 5), with possible extensions at the discretion of the party granting the temporary entry and stay.
- Business visitors for investment purposes (article 10.7: point 5) are entitled to stay 90 days within any six-month period.
- Skilled contractual service suppliers or independent professionals in the meaning of the agreement and from a wider range of sectors will be able to stay in the other party for a period of 12 months (double what was previously possible).
CETA on Customs Facilitation
The second aspect of CETA that may positively impact moves between Canada and the EU is the intention to streamline and make customs procedures more transparent and co-operative. These general measures are covered in Chapter Six of the CETA agreement on customs and trade facilitation.
Essentially, Canada and the EU pledge to apply “simplified, modern and where possible automated procedures for the efficient and expedited release of goods” (p.17). This includes timely and relevant publication of information relevant to importing and exporting goods, maintaining contact points to receive inquiries, plus an agreement to provide for the electronic submission of customs information and work towards establishing a “single-window system”, i.e., a single location for one-time documentary and physical verification of consignments (chapter 6: articles 6.1 - 6.3).
CETA in Conclusion
Both the EU and Canada are hailing CETA as a major milestone in a progressive global trade agenda.
The agreement could potentially make mobility easier and offer the possibility of efficiencies and changes for existing mobility programs, together with the opportunity to develop new mobility programs and management systems.
Please contact your local SIRVA® representative to find out more.