C-1322/79

defendant,

APPLICATION for the annulment of the decision notified to the applicant on 25 September 1979, whereby the Commission rejected the complaint lodged by the applicant on 19 June 1979 with the object of obtaining payment of the expatriation allowance provided for by Article 4 of Annex VII to the Staff Regulations,

T H E C O U R T (Second Chamber)

composed of: P. Pescatore, President of Chamber, A. Touffait and O. Due, Judges,

Advocate General: G. Reischl Registrar: H. A. Rühl, Principal Administrator

gives the following

The facts of the case, the course of Upon hearing the report of the Judge- the procedure and the conclusions, Rapporteur and the views of the submissions and arguments of the parties Advocate General, the Court (Second may be summarized as follows: Chamber) decided to open the oral procedure without any preparatory inquiry. I — Facts and written procedure II — Conclusions of the parties Mr Vutera, who was born in Italy in 1944, emigrated in 1947 to Belgium, The applicant claims that the Court where his father was living. He resided should: in that country without break, was Declare the application admissible and educated there and held various jobs well-founded; there until his recruitment as a member of the local staff by the Commission on Consequently, annul the decision 17 March 1975. notified to the applicant on 25 September 1979, whereby the On 1 April 1979 he was appointed as a Commission rejected the complaint probationary official in Grade D 3 by lodged by the applicant on 19 June 1979 decision of the Head of the Recruiting, pursuant to Article 90 (2) of the Staff Appointments and Promotion Division Regulations of Officials of the European and became an established official in that Communities with the object of grade on 1 October 1979. obtaining payment of the expatriation allowance provided for by Article 4 of He has retained his Italian nationality, Annex VII to the Staff Regulations; his wife is also Italian, his children Order the Commission to pay the costs. attend the Italian school in Brussels and he is enrolled on the Italian register of The defendant contends, subject to all electors. necessary reservations, that the Court should: At the time of his appointment he noticed that a sum of BFR 1 930 in Dismiss the application as unfounded; respect of the foreign residence Order the applicant to pay the costs. allowance appeared amongst the items making up his salary, and since he considered that he ought to be entitled III — Summary of the sub- to the grant of the expatriation missions and arguments of allowance, he submitted a complaint the parties pursuant to Article 90 of the Staff Regu- lations; that was rejected and he then Following the applicant's abandonment lodged this application, which reached of the submission based on the the Court Registry on 21 December infringement of Articles 7 and 189 of the 1979. EEC Treaty and Article 24 of the Treaty

of 8 April 1965 establishing a Single exist even where the official has already Council and a Single Commission of the resided in the State in which he is European Communities, there remains employed for five years and six months only the submission based on the breach before entering the service; such is par- of the general principle of equality and ticularly the case as regards family and non-discrimination. cultural ties with the country of origin, the exercise of rights and obligations under public law which derive solely (a) The applicant maintains that the from the laws of the State of origin, the principle of equal treatment and non- difficulty encountered by the children in discrimination was breached by the fact finding employment in the country of that in its explanation of the grounds on origin owing to the fact that the which it refused to recognize the diplomas obtained in the host country applicant's entitlement to the expatriation are not equivalent, the lack of access to allowance the Commission relied upon posts in the public service in the host Article 4 (1) of Annex VII to the Staff country and more generally the absence Regulations, whereas "that provision of political rights in the host country. creates an unwarranted difference of treatment between officials who are in fact placed in comparable situations". Moreover, an official recruited after residing in his host country for less than five years continues to receive the ex- That provision grants the expatriation patriation allowance throughout his allowance: career, even though the objective circumstances of expatriation are the "(a) to officials: same for an official who had resided there for more than five years and six — Who are not and have never months.

It is European territory of that State. wrong to rely on the notion that only a For the purposes of this change of residence resulting from entry provision, circumstances arising into the service of the Communities gives from work done for another rise to the expatriation allowance. Whilst State or for an international that notion may be appropriate in the organization shall not be taken case of officials who effectively leave into account. . ." their own country, it is not so for those who had resided in the host country for According to the applicant, the "special more than five years, because such a expenses and disadvantages" which are period of residence does not of itself the reason for the existence of the ex- imply the absence of expatriation; on the patriation allowance (judgment of 7 June contrary, expatriation exists in such cases 1972 in Case 20/71, Sabbatini v and may be ascribed to employment in European Parliament [1972] ECR 345) the service of the Communities.

VUTERA v COMMISSION

That criterion prevails over period exceeding five years and "officials that of nationality, since the allowance who left their own country for economic may be granted to an official who is a reasons and, under conditions which national of the State in which he is were often difficult, performed modest employed, provided that he resided in duties in the private sector in the State another State during the ten years where they are employed, but are preceding his recruitment. considered not to come within the concept of expatriation".

residence which he is required to adopt as a result of his duties in the service of (b) The defendant emphasizes first of the Community does not constitute his all that the two comparisons presented habitual residence. by the applicant concern officials who are not nationals of the State in which Likewise, in comparing his situation with they are employed and whose position, that of an official recruited in a foreign with regard to the grant of the ex- country who continues to receive an patriation allowance, is principally expatriation allowance, the applicant determined by reference to the length of failed to point out that the change of their residence within the territory of residence of an official who happens to that State and, secondly, by reference to be living in a foreign country is due to the nature of the occupation which his recruitment, whereas the residence of necessitated their residence within the foreign officials who have habitually territory of the said State, before they

JUDGMENT OF 15. 1. 1981 — CASE 1322/79

exercise certain political rights in by Article 4 (2) of Annex VII. his host country, because "the submission relating to the breach of (c) In his reply the applicant observes the principle of equal treatment first of all that the relevance of the cannot be founded solely on disad- submission put forward is not disputed vantages, the existence of which is by the defendant. It follows from that, in not entirely independent of the his opinion, that in so far as provisions applicant's volition".

although beyond dispute, may not be them. taken into consideration because Having recalled and developed his "the taking of such into account submission, the applicant repeats that would amount to replacing the there is discrimination owing to the fact objective concept of expatriation that, on the pretext that he had resided defined by the Staff Regulations with for more than five years and six months a subjective concept which would in the State in which he is employed, he vary from one individual to is denied the expatriation allowance, another", as was suggested in the whereas it is granted to an official whose opinion of Mr Advocate General circumstances are the same but who was Warner (judgment of 17 February employed in the service of another State 1976 in Case 42/75 Delvaux v or an international organization, or who Commission [1976] ECR 167) and in was in the service of the Community, the opinion of Mr Advocate General and whereas it is also granted to an Trabucchi (judgment of 20 February official who resided for less than five 1975 in the Airola case cited above). years and six months in the State in

VUTERA v COMMISSION

The applicant does not perceive the With regard to the judgment in the inference which the Commission Devred case, from which the purports to draw from this premise, Commission purports to draw a general which he considers incorrect, since it rule applicable to the present case, not does not refute the argument that the only is that case essentially different contested provision treats identical or I — The judgments in the Airola, Van Den Broeck, comparable situations differently. Gunnelia, Sabbatini and Bauduin cases, cited above.

JUDGMENT OF 15. 1. 1981 — CASE 1322/79

purposes of the grant of the expatri- that it is not a question of granting ation allowance the nationality of the this allowance to any official who official should be the essential, or considers that he is an expatriate in indeed the sole, factor to be taken the country in which he is employed, into account". and that "the possible existence of (2) The defendant repeats that the unequal treatment must therefore be criterion of change of residence for determined not by reference to a the grant of the expatriation general concept of 'expatriation', allowance was defined by the Court which is undefined and moreover to

That principle was merely Community institution or other supplemented by two provisions international organization. As which, without reducing its scope, regards the first category of officials ensured a liberal application thereof. referred to, the grant of the ex- Consequently, "since the criteria patriation allowance arises from the thus definea are general, objective deliberate generosity of the and appropriate to the intended Community legislature, which did purpose, they cannot give rise to not wish to penalize officials who discrimination".

(4) With regard to the argument that the Furthermore, the fact that the judgments applicant could change his national- relied upon by the Commission were ity, the defendant maintains that that delivered before Regulation No 912/78 argument was only put forward as came into force is immaterial, since the an alternative and repeats that it is insertion of paragraph (3) into the text nevertheless relevant, since the of Article 4 of Annex VII relating to the Commission merely observed that a foreign residence allowance cannot in factor which may vary according to any way invalidate the guidance the volition of the person concerned provided by the previous cases, because constitutes by its nature a criterion the applicant does not establish or "even which is less objective than the claim that the insertion of that provision criteria over which an official has no has in any way altered the purpose of the control. expatriation allowance or the conditions for granting it". (5) In spite of the denials by the In conclusion, the defendant repeats that applicant, the defendant "adheres to in his opinion the applicant has sub- the view that the applicant's stituted for the criteria laid down by the argument amounts to replacing the Staff Regulations a vague, indefinable objective concept of expatriation and essentially subjective concept of with a subjective concept which expatriation without showing that the varies from one individual to conditions for the grant of the expatri- another". ation allowance are arbitrary, treat differently officials who are placed in (6) With regard to the applicant's similar or comparable situations or are submission that the cases cited by the incompatible with the object of the said Commission are not relevant, the allowance. defendant repeats that, whilst it is correct that the Court did not have IV — Oral procedure occasion to consider the precise question which is the subject of this The applicant, represented by L. Goffin, case, it none the less had occasion in M. Mahieu and R. Dupont, all of the the various cases cited to define in Brussels Bar, and the Commission, general terms the purpose of the represented by Denise Sorasio, assisted expatriation allowance and the by D. Jacob, of the Brussels Bar, criteria for granting it. The presented oral argument at the sitting on defendant also maintains that the 9 October 1980. case of Devred, née Kenny-Levick v The Advocate General delivered his Commission (cited above) may opinion at the sitting on 20 November properly be relied on in this case. 1980.

"An expatriation allowance shall be paid, equal to 16% of the total amount of the basic salary plus household allowance and the dependent child allowance paid to the official,

(a) to officials:

Who are not and have never been nationals of the State in whose territory the place where they are employed is situated; and

Who during the five years ending six months before they entered the service did not habitually reside or carry on their main occupation within the European territory of that State. For the purposes of this provision, circumstances arising from work done for another State or for an inter- national organization shall not be taken into account;

VUTERA v COMMISSION

(b) to officials who are or have been nationals of the State in whose territory the place where they are employed is situated but who during the ten years ending at the date of their entering the service habitually resided outside the European territory of that State for reasons other than the performance of duties in the service of a State or of an international organization."

5 In order to deal with that submission it is necessary to examine the system set up by the Community legislature.

JUDGMENT OF 15. 1. 1981 — CASE 1322/79

6 The provisions of Article 4 considered as a whole indicate that, whilst the Community legislature made the fact of foreign origin the sole basis for the grant of the foreign residence allowance, for the purposes of the grant of the expatriation allowance it adopted actual change of residence as the primary criterion and regarded nationality as merely of secondary importance.

7 This primacy of the criterion of residence over that of nationality is confirmed by Article 4 (1) (b), whereby the expatriation allowance is even granted to officials who are nationals of the country in which they are employed, provided that they resided in another State during the ten years preceding their recruitment.

8 For the purpose of applying that criterion the regulations established specific categories with figures, resulting necessarily in the need to fix appropriate limits. In fact, the condition of non-residence takes into account a period of five years ending six months before entry into the service; in this regard an exception is provided for in favour of officials who during that period resided in the country in which they are employed, where they were in the service of another State or of an international organization, account having been taken of the fact that under those circumstances they cannot be deemed to have established a lasting tie with the country in which they are employed.

9 The application of those categories may doubtless give rise to marginal cases in which officials find that payment of the expatriation allowance is denied to them when their circumstances are close to those defined by Article 4 of Annex VII; nevertheless, it cannot be inferred from that circumstance that those provisions contain arbitrary differentiation, when, based on objective factors, they apply in the same manner to all officials who are placed in the situation contemplated by the Staff Regulations.

THE COURT (Second Chamber)

hereby:

1. Dismisses the application;

2. Orders the parties to bear their own costs.

Pescatore Touffait Due

Delivered in open court in Luxembourg on 15 January 1981.