Observation (CEACR) - adopted 2009, published 99th ILC session (2010)

Equality of Treatment (Social Security) Convention, 1962 (No. 118) - Egypt (Ratification: 1993)

The Committee notes the information provided by the Government in 2007 in its reports on Conventions Nos 19 and 118, as well as the replies to the Committee’s previous direct requests concerning these Conventions. It observes with regret that, since the ratification of Convention No. 118 by Egypt in 1993, there has been no change in the social security law and practice in Egypt as regards the application of this instrument, the main provisions of which continue not to be fulfilled.

Article 3 of the Convention. Equality of treatment. According to section 2(2) of the Social Insurance Act (No. 79 of 1979), the provisions of this Act apply to foreign nationals on condition that the duration of their contract is not less than one year, and that there is a reciprocity agreement between their country of origin and Egypt, subject to non violating the provisions of conventions ratified by Egypt. The Government states nevertheless that the nationals of countries which have ratified Convention No. 118, enjoy insurance benefits provided under the Social Insurance Act regardless of the duration of their contracts or the existence of the reciprocity agreement. The same statement is made by the Government in its report of 2007 on Convention No. 19. The Committee takes due note of these statements and understands that the Convention has a higher rank in the national legal system than the law. The Committee notes that the Government has not supplied any documentary evidence requested by the Committee proving that the above interpretation given by the Government is applied in practice by the social security institutions. The Committee also recalls that in its previous reports on the application of Conventions Nos 19 and 118 the Government has been consistently making the opposite statement that foreign nationals could enjoy social insurance benefits subject to the duration of their contract being not less than one year. In this situation and in order to dissipate any doubts as to the fact that the requirements of the Convention overrule the abovementioned limitations contained in the Social Insurance Act, the Committee would like the Government to instruct the responsible social security institutions in the country to disregard the duration of contract and reciprocity agreement requirements under section 2(2) of the Social Insurance Act with respect to the nationals of 37 countries which have also ratified Convention No. 118, and for the accident compensation benefits, with respect to the nationals of 120 countries which have also ratified Convention No. 19.

Article 5. Payment of benefits abroad. The Committee regrets to note that, since the ratification of the Convention, the Government has taken no measures to comply with its Article 5, which obliges Egypt to establish financial mechanisms for the transfer of invalidity, old-age, survivors’ benefits and death grants, and employment injury pensions in case of residence of the beneficiary abroad. The Government repeats that there are no effective ways to transfer pensions outside of Egypt, if there is no reciprocity agreement, but has never mentioned the existence of any such agreement or its intention to conclude one. The Committee wishes to point out in this respect that Article 5 obliges the ratifying States to export benefits abroad even in the absence of any bilateral social security agreements with the country of nationality or the country of residence of the beneficiary concerned and to take unilateral measures to this effect.

The Government further repeats that the insured persons themselves may transfer their entitlements to any bank which has branches outside Egypt and which may therefore forward them to the country where the beneficiary resides. The Committee wishes to point out in this respect that by placing the obligation to transfer benefits abroad on the State, Article 5 of the Convention specifically intended to prevent situations where beneficiaries would have to make their own individual arrangements for the transfer of their entitlements abroad at their own expense. By ratifying the Convention, the Government has undertaken to ensure that the responsible social insurance institutions shall deliver the abovementioned benefits to the new place of residence of the beneficiary outside Egypt and shall bear the cost of such transfer. For this purpose appropriate banking arrangements shall be put in place with the help of the National Bank, if need be, and the administrative assistance of the countries concerned, which they have to afford to Egypt free of charge under Article 11 of the Convention.

Finally, the Government reiterates that the beneficiary residing abroad has to submit evidence as to his entitlement to a pension each year in January. The Committee would like the Government to explain how, in the absence of reciprocity agreements and administrative assistance between Egypt and other countries, the beneficiaries residing abroad can effectively submit evidence of their entitlement to the social security institution inside Egypt. Please also explain how the survivors’ benefit and the death grant could be claimed by the dependants of the deceased insured person who are not nationals of Egypt, reside abroad and have never been to Egypt.

The Committee observes that the absence of the practical methods for pensions transfer outside of Egypt compels the beneficiaries leaving the country to abdicate their right to a pension by applying for a lump sum in its place, in accordance with sections 27 and 28 of the Social Insurance Act. The conversion of a pension or an annuity into a lump sum, even when this is done at the request of the beneficiary, and particularly under the threat of loosing such pension in case of moving outside of Egypt, is contrary to the letter and the very purpose of the Convention. In such a regrettable situation, it is the role of the supervisory system to alert the Government, as well as other States parties to the Convention, to the fact that Egypt is in breach of its international obligation under Article 5 of the Convention to guarantee the payment of respective benefits to the nationals of States which have accepted the obligations of the Convention for the same branch, as well as to refugees and stateless persons, in case of their residence abroad, irrespective of the country of residence. In doing so, the Committee strongly urges the Government to demonstrate the political will to institute an effective system of the transfer of the Egyptian social security benefits abroad by taking appropriate measures either unilaterally or within the framework of bilateral and multilateral social security agreements, including schemes for the maintenance of the acquired rights and rights in course of acquisition mentioned in Articles 7 and 8 of the Convention.

Articles 7 and 8. The Committee observes that the information supplied by the Government in reply to the Committee’s request has nothing to do with the content of these Articles of the Convention and the questions raised by the Committee. To clarify the meaning of the obligations laid down by these Articles, the Government may wish to seek technical assistance from the Office concerning existing international legal framework for the schemes for the maintenance of the acquired rights and rights in course of acquisition.

Article 10. Coverage of refugees and stateless persons. The Government states that the Social Insurance Act does not include any provision concerning refugees and stateless persons, as such a provision, as laid down in the Convention, does not include the condition of reciprocal treatment. The Committee wishes to refer the Government to its statement under Article 3 of the Convention, which declares that according to section 2(2) of the Social Insurance Act, precedence is given to the provisions of international Conventions ratified by Egypt. This provision overrules the condition of reciprocal treatment required by this same Act. The Committee would therefore like the Government to formally confirm in its next report that, by virtue of Article 10 of Convention No. 118 ratified by Egypt, refugees and stateless persons are granted equality of treatment with Egyptian nationals in all aspects of social security covered by the Convention.