C-217/82

J U D G M E N T OF T H E COURT (THIRD CHAMBER) 1 DECEMBER 1983 1

Charles H. V. Depoortere v Commission of the European Communities

(Official — Convertible accounts)

Case 217/82

Non-contractual liability — Conditions — Illegality — Damage — Chain of causality (EEC Treaty, Art. 215, second paragraph)

In Case 217/82

composed of: Y. G a l m o t , President of Chamber, U . Everling and C. K a k o u r i s , J u d g e s ,

Advocate General : P . V e r L o r e n van T h e m a a t Registrar: J. A. P o m p e , D e p u t y Registrar

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the applicable on the two markets develop procedure and the conclusions, sub- separately, and the rate of Belgian and missions and arguments of the parties Luxembourg francs on the regulated may be summarized as follows: market is, as a general rule, higher than that on the free market. The relevant legislative provisions enumerate the transactions and the conditions in which the purchase or sale of the currency may or must be carried out, both on the I — Facts and written p r o c e d u r e regulated market and on the free exchange market.

the sole proviso that the sums used to territory and from benefiting, in the that end should not be larger than the latter case, from the regulated market. amount of the salary paid by the Further, the Community institutions, in Community. the person of the respective directors of administration, made representations to With a view to facilitating control, it was the Institut Belgo-Luxembourgeois des decided in the course of the 1960s to Changes, requesting that officials who introduce special foreign convertible were not of Belgian or Luxembourg accounts, through which all the nationality might once again be exchange transactions on the regulated permitted to have their whole salary paid

particular, from: Many officials adopted the practice of using the special foreign convertible accounts in order to buy foreign "any transaction designed to abuse the currency on the regulated market which above-mentioned provisions, such as they immediately re-sold on the free arbitrage, that is to say the purchasing of market ("arbitrage"), thereby making a foreign currency on the regulated market profit on the difference between the two or the transfer of currency into foreign rates ("exchange premium"). convertible accounts with the aim of obtaining means of payment intended to In order to put a stop to that practice, cover current expenses in the Benelux which was considered an improper use Economic Union". of the facilities, in December 1981

However, that new legislation had the effect of depriving officials of their He took the view that the Commission complete freedom in deciding whether to had thereby failed to respect his use their salary on the territory of the legitimate interest in the matter of the Benelux Economic Union or outside that payment of sums which were owed to

Abolish the discrimination regarding re- In consequence, the Commission should muneration and the mechanisms relating ensure that the net amount which is thereto, in particular by ordering the ultimately paid to the officials is identical Commission to pay the remuneration and of the same value, whatever their into similar accounts which may be used nationality. As regards the salaries of for similar purposes by all officials; Belgian officials working in Belgium, the Commission fails to comply with that Order that the infringement of Article 12 requirement inasmuch as it neglects to of the Protocol on the Privileges and take into consideration the events which Immunities of the Communities should occur between the stage at which it cease; draws up the orders for the transfer of funds (orders for payment to financial Award the applicant payment of income institutions) and that at which the orders of which he has been deprived since for payment are actually credited to the February 1981 amounting to BFR accounts of the payees. 125 500, which amount may be increased in the course of the proceedings; The applicant explains, in that respect, that in Belgium, as a result of the Order the defendant to pay the costs. existence of two exchange markets, there

DEPOORTERE v COMMISSION

In as the "exchange premium", has at times accordance with that provision, the reached between 5% and 12%. Commission opted for payment by bank transfer order. The Staff Regulations do not stipulate in which franc officials in Belgium are to be paid. However, payment should normally be made in the currency which 2. Breach of the principle that there should is used for internal payments. That be no discrimination on the basis of interpretation would ensure that equal nationality remuneration would have the same pur-

In the applicant's view, all the officials of the In that context the Commission states Communities, whatever their nationality, that, in its view, there are not two are "régnicoles" in view of the fact that different Belgian francs, but only two they are all required, under Article 20 of sorts of bank account, namely, on the the Staff Regulations, to reside at their one hand, the accounts of régnicoles or place of employment. residents and persons treated as such, which gives access to the regulated market only for certain exchange The Commission failed to fulfil its transactions, and, on the other hand, the obligation not to discriminate against its convertible accounts, which give access Belgian staff inasmuch as it did not thereto for all exchange transactions. oppose, from the outset, the measures Further, the difference does not lie in the nature of the currency, but rather in that taken by the Institut Belgo-Luxem- of the account to which that currency is bourgeois des Changes. Moreover, the credited.

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Mr Depoortere adds that non-Belgian result of taking up their duties in the and non-Luxembourg officials receive an Communities and who retain certain expatriation allowance and may rely on financial obligations in their countries of the provisions relating to transfers in origin or who wish to keep money there Annex VII to the Staff Regulations for for other reasons, and, on the other payments abroad which they are obliged hand, Belgian and Luxembourg officials, to make and which they can substantiate. whose obligations are similar to those of Thus the fact that they may have certain their compatriots who are not in the financial obligations in their country of service of the Communities. origin may not be advanced as a reason for granting them, in addition, privileged status for the remaining part of their That assessment is confirmed by the fact salary. that retired officials who are not of Belgian or Luxembourg nationality and who, of their own accord, continue to reside in Belgium or Luxembourg may (b) The Commission considers that the retain a special convertible account for a principle of equality is respected. No period of three years only from the date distinction is made as regards the on which they leave the service. If, after payment of salaries between Belgian or the expiry of that period, they decide to Luxembourg officials and other officials, continue to reside there, they are treated, since the two groups are paid in Belgian for the purposes of the exchange francs. legislation, in the same way as other residents in Belgium or Luxembourg.

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Article 169 of the Treaty. That rule was implemented by Article 1 of Regulation No 549/69 of the Council The applicant maintains that, in this of 25 March 1969 determining the cat- case, the matter should have been egories of officials and other servants of brought before the Monetary Com- the European Communities to whom the mittee, in view of the fact that Belgium provisions of Article 12, the second clearly failed to comply with the paragraph of Article 13 and Article 14 of obligation arising from the above- the Protocol on the Privileges and mentioned provision. Immunities of the Communities apply (Official Journal, English Special Edition (b) The Commission replies that those 1969 (I), p. 119). That article expressly provisions show that only differences provides that Article 12 (c) of the which are "appreciable and lasting" are Protocol applies to all officials.

The assessment of the existence of such a applicant admits that, in that respect, difference and the commencement of the advantage in question is quite proceedings for failure of a State to fulfil exceptional inasmuch as it derives from its obligations under the Treaty. In that the existence of two exchange markets in respect, the Court held in its judgment of Belgium, which is unique among the host 1 March 1966 (Case 48/65, Liitticke countries of major international organ- [1966] ECR 19) that a private individual izations. Nevertheless, that advantage, could not require the Commission to which was voluntarily accorded, has commence proceedings for failure of a become in itself a facility customarily State to fulfil its obligations under the accorded, at least in the countries which Treaty in a specific case. have accorded it, as a result in particular of its long existence, of the legal recognition granted to it by the

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withdraw without an amendment to the In that respect, Section 18 of Article 5 of Protocol. The principle of non-discrimi- the Convention on the Privileges and nation requires that such a facility be Immunities of the United Nations and applied equally to Belgian officials. Article 6 of the Convention on the Privileges and Immunities of the Specialized Agencies, together with similar provisions of numerous Western European organizations such as the The complaint made against the Council of Europe, the Organization for Commission is that it has failed to make Economic Cooperation and Develop- every effort, in accordance with its duty ment, the Western European Union and as custodian of the Treaties, to demand the European Space Agency, provide that the system instituted by the Institut that the officials of those organizations, Belgo-Luxembourgeois des Changes be as far as exchange facilities are applied for the benefit of the applicant. concerned, enjoy the same privileges as In addition, the Commission should have officials of a comparable rank belonging taken action pursuant to Article 19 of to diplomatic missions accredited to the the Protocol on the Privileges and Government in question. Article 38 of Immunities in order to remove the the Vienna Convention on Diplomatic inequality in the treatment of officials, Relations establishes that the State to either by requiring that the facility be which such officials are accredited is not abolished, or by demanding that it be under an obligation to accord exchange applied equally to its Belgian officials facilities to diplomatic servants who are employed in Belgium. nationals of that State or who are permanently resident in that State.

However, the real significance of the privileges and immunities listed in Article In addition the Commission states that 12 of the Protocol depends on the the privileges which international wording of each paragraph thereof. The officials enjoy are conferred exclusively advantages referred to under (c) apply in the interest of the organization in only in so far as international practice order to ensure their independence. is to accord such facilities to officials Consequently, an official is not entitled of international organizations. A com- to exploit them for his own benefit. In parative study of the situation of officials the context of the present case, it should of a number of international organi- be observed that it is in the interests of zations shows that it is international the Communities that officials not of practice not to accord exchange facilities Belgian or Luxembourg nationality who to officials who are nationals of the State have come to Belgium or Luxembourg to in which they are employed. fill a post in the Communities and who

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receive their salary in Belgian francs have budget of the European Communities, the guarantee of being able to repatriate Official Journal 1977, L 356, p. 1). That money to their country of origin at the principle excludes the possibility of using official rate of exchange prevailing on contributions in the currency of Member the regulated market. On the other hand, States for specific purposes and par- no such interest for the Communities ticularly in relation to methods of exists as far as Belgian or Luxembourg payment which differ according to officials are concerned, since, for them, nationality. no such monetary problem arises.

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applicable between February and orities, and not the Commission, to November 1981 is annexed to the adopt the necessary measures in the application (Annex 6). matter; this was in fact done by the pub- lication of the circular of the Institut According to the applicant, that loss was Belgo-Luxembourgeois des Changes of caused by the Commission, which, 1 June 1982. contrary to the principle of non-discrimi- nation, deliberately opted to pay salaries Finally, the Commission contends that, into different accounts and failed to take since an individual may not demand that the necessary measures to guarantee proceedings under Article 169 of the equal treatment for its officials in Treaty be commenced, he is equally not Belgium! entitled to demand compensation for a loss arising from the fact that such The Commission objects, in the first proceedings were not commenced. place, that direct arbitrage, in relation to which the applicant establishes the alleged loss, has always been considered an improper use of the facilities offered, IV — O r a l p r o c e d u r e even if it has never been declared illegal by the Belgian or the Community auth- The parties presented oral argument at orities. the sitting on 15 September 1983. Moreover, since arbitrage was possible The Advocate General delivered his by virtue of the Belgo-Luxembourg opinion at the sitting on 17 October provisions, it was for the national auth- 1983.

Decision

1 By application l o d g e d at the C o u r t Registry on 12 August 1982, M r D e p o o r t e r e , an official of the Commission of the E u r o p e a n Communities in G r a d e A 4, l o d g e d an application against the Commission in connection with the B e l g o - L u x e m b o u r g rules relating to exchange transactions and, m o r e especially, the rules on special foreign convertible accounts.

4 In accordance with the rules set out above, the salary of the applicant, who is of Belgian nationality, was paid by the Commission into a non-convertible account which he had designated for that purpose. Considering that the Commission had thereby "failed to respect his legitimate interest in the matter of the payment of sums owed to him, because it had not adopted at the proper time the measures required by the facts and by law", he submitted on 17 November 1981 a complaint in accordance with Article 90 (2) of the Staff Regulations of Officials.

s That complaint was rejected by decision of the Commission of 18 May 1982, and the applicant then lodged this application by which he in substance seeks to obtain, on the one hand, the payment of his salary into a special foreign convertible account and, on the other hand, the payment of the sums of which he has been deprived since February 1981 as a result of the payment of his salary into a non-convertible account.

6 As regards the part of the application claiming payment of salary into a convertible account, it should be remembered that, according to Articles 90 (2) and 91 (1) of the Staff Regulations of Officials the Court has jurisdiction in disputes between the Communities and any person to whom the Staff

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Regulations apply regarding the legality of an act adversely affecting such persons, either where the institution concerned has taken a decision or where it has failed to adopt a measure prescribed by the Staff Regulations. In addition, according to Article 91 (2) of the Staff Regulations, an appeal shall lie only if it is lodged following the express or implied rejection of a complaint, which, where it is directed against a failure to adopt a measure, must have been preceded by a request to the appointing authority that it take a decision, within the meaning of Article 90 (1).

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applicant to open a convertible account giving him access to the regulated market for all exchange transactions. However, that state of affairs arises from the Belgo-Luxembourg legislation on exchange transactions and doe;; not originate in any specific measure or failure to adopt such a measure which may be attributed to the Commission.

12 In those circumstances, the applicant has not established the existence of a chain of causality between unlawful conduct on the part of the Commission and the damage complained of, so that this part of the application must also be dismissed.

Costs

1 3 Under Article 69 (2) of the Rules of Procedure, the unsuccesful party is to be ordered to pay the costs if they have been asked for in the successful party's pleading.

14 However, under Article 70 of the Rules of Procedure, costs incurred by the institutions in applications by servants of the Communities are to be borne by the institutions themselves.

Delivered in open court in Luxembourg on 1 December 1983.

For the Registrar

H. A. Rühi Y. Galmot Principal Administrator President of the Third Chamber