Under the agreement, employment is ordinarily subject to the coverage laws of only the country where the employee performs the work. An employee whose work is otherwise covered under the laws of both countries remains covered only under the laws of the country where he or she performs the work. A self-employed person whose work is otherwise covered under the laws of both countries is covered only under the laws of the country in which that person resides.

The agreement provides several exceptions to the territoriality rule to ensure that a worker remains covered under the system of the country to which the individual has the greater attachment. The references cited below list these exceptions.