Under the agreement, employment is ordinarily subject to the laws on coverage of only the country where the worker performs the work (territoriality rule). A person working in employment or self-employment who would otherwise have dual coverage under the laws of both countries will remain covered only under the laws of the country where he or she performs the work.

The agreement provides several exceptions to the territoriality rule to ensure that a worker’s coverage is under the system of the country to which he or she has the more direct connection.